Friday, February 24, 2006

If at first you don't succeed........



FALSE START!
5 YARD PENALTY!
STILL FIRST DOWN!

Almost exactly one year ago, I thought it would be a really good idea to write a blog on the Malcolm Baldrige National Quality Award criteria and how they could be used to improve small business. Not every business has the necessary assets to compete for the Baldrige, or even for one of the local quality awards. But, every business, even a one man operation or a "mom and pop" operation can use the Baldrige criteria as a road map for improvement.

The idea was to provide you with links and comments to help you in your efforts to improve. But,,,,2005 didn't turn out to be the year I thought it would be and the blog fell by the wayside. Among other things, I had to give up my spot on the Missouri Quality Award Board of Examiners. In March, I had a minor heart attack. We had planned to build a new house in 2005 and that plan ended up being put on hold.

But, 2006 is a new year. Things are back on track and the Excellence-in-Business blog is back. Since it's been almost a year since the last post, I've edited all the original posts, making them current. I will be here on a somewhat regular basis to provide you with what I hope is good information for your quest for quality.

To get us started, my first suggestion is that you go to the NIST web site and download a copy of the 2006 Baldrige Criteria for your particular business. There are three different sets of criteria, "Criteria for Performance Excellence", "Education Criteria for Performance Excellence", and "Health Care Criteria for Performance Excellence."

While your on the NIST site, take a look around at the other material that's available there. We'll be talking about it in future posts.

Of course, your comments are welcome and encouraged.

Categories: , ,

Is It Armageddon For Customer Service?

First, let me assure you that I AM NOT A SENIOR CITIZEN! Let me repeat that to be sure we're all on the same page. I AM NOT A SENIOR CITIZEN! Not that there's anything wrong with that. Obviously, "Senior Journal.com" is a fine on-line publication. The first time I ever visited their site, I found an article that is worth sharing. But, I'm not a subscriber because I AM NOT A SENIOR CITIZEN.

Please don't think I'm putting seniors down, or that I'm vain or something. It's just that my wife is very touchy about her age, and if someone thinks I'm a senior citizen, then by association that makes her one too.

Now that that's out of the way, here's an interesting article on customer service, or the lack thereof, at a national retail chain. It should be a lesson to all of us who serve any kind of customer, which is every one of us. When procedures are so etched in stone that there can be no variation, then customer service suffers.

As the author says, if there can be no variation from procedures, then there is no need for managers. A minimum wage part-time employee with a copy of the policy manual can run the entire operation. Enjoy the article.
Categories: , ,

Getting Your Arms Around the Elephant

From the Columbia City, IN "Post & Mail" comes a story of elementary school improvement resulting from the use of the Baldrige Standards. Northern Heights Elementary School has been using the criteria as a means of improving test scores, and it's working. Students carefully track their test results and three times a year they take a practice test similar to the ISTEP test which is used to measure school improvement. Since starting the program five years ago, the school has improved its scores on the real test.

Any organization can benefit from using the Baldrige critera as a business (school) mode.Categories: , , ,

Snap-On Tools

Originally posted April, 2005

They're not a small business by any stretch of the imagination, but Snap-On Tools of Kenosha, WI recently reported a 27% increase in their first quarter operating earnings. According to their press release, "Operating earnings in the first quarter of 2005 benefited from lower costs, including improved efficiencies and greater productivity from continuous improvement activities."

You can learn more about Snap-On tools including their mission statement (to delight our customers - professional tool and equipment users worldwide - by creating innovative, productivity-enhancing products, services and solutions), core values, and their thirty-six page Code of Conduct on their web site.
Categories: , , ,

Where's the passion?

From the Peppers and Rogers web site, comes an exerpt from Lior Arussy's book, Passionate and Profitable, Why Customer Strategies Fail and Ten Steps to Do Them Right. The pdf file is the first chapter of the book which outlines ten fatal mistakes business make in trying to focus on the customer. The numbers in parentheses refer to the Baldrige Criteria which address theses "fatal" mistakes.

The author points out that in spite of many so-called customer initiatives, customers are feeling more neglected than ever and that without loyal customers, a business is doomed to fail.

1. "Culture of the New"

We all like new things. New is good. Old is bad. This "culture of the new" will lead employees to lavish attention on new customers while ignoring the old. (3)

2. "Lipstick on the Pig"

Customer strategies are not cosmetics. They must have substance. A pig with lipstick is still a pig......and customers know it. (1,2,6)

3. "Passion Loss"

Every company begins with a passionate entrepreneur with a good idea. As the company grows, the bean counters take over and the bottom line becomes the most important thing. The passion is lost. Without the passion, the product becomes a commodity and the company becomes vulnerable to the competition. (1,3)

4. "Real Cost of Cost Reduction"

There's no free lunch and there's no free cost reduction. Someone pays, and that someone is the customer. Cost reductions dilute the relationship with the customers. (3,6)

5. "Failure to Operationalize"

A customer-centered initiative must have a company-wide strategy. Without a plan, it's just a nice idea. (1,2,3,6)

6. "You Get What You Pay For"

Traditionally, employees are paid for productivity; quantity, not quality. If you don't back up your customer-focus initiative with a matching compensation program, employees will get the idea that it's really not that important. They believe that you're saying "This is not important to us, but we want you to volunteer to take care of this yourself." (5)

7. "Management of Change"

"Change does not happen by itself." Pepole don't like change. They're afraid of change. Management of change must be a key part of any new strategy. (1,2,5)

8. "Lack of Leadership"

Get out of your comfort zone. Company leadership must look at the business through the eyes of the customer. (1)

9. "Unstructured Relationship"

What is the long-term strategy for each customer? Do you have one, or do you make a sale and hope for the best? The author makes a strong case when he says that "In our research, we could not find a single well-documented customer plan detailing a two to three-year relationship." No company can survive without long-term relationships with their customers. It's amazing that this key fact goes unrecognized by so many companies. (1,2,3)

10. "Technology Shortcut"

Customer strategy does not mean buying a new piece of technology. That may be part of it, but the technology is just a tool. There are no shortcuts when it comes to building a relationship with customers. (1,2,3,4,6)


Read the exerpt here, and if you like it, you can purchase the book here. You can also subscribe to Peppers and Rogers excellent newsletter on their web site.

Where's the Passion?

From the Peppers and Rogers web site, comes an exerpt from Lior Arussy's book, Passionate and Profitable, Why Customer Strategies Fail and Ten Steps to Do Them Right. The pdf file is the first chapter of the book which outlines ten fatal mistakes business make in trying to focus on the customer. The numbers in parentheses refer to the Baldrige Criteria which address theses "fatal" mistakes.

The author points out that in spite of many so-called customer initiatives, customers are feeling more neglected than ever and that without loyal customers, a business is doomed to fail.

1. "Culture of the New"

We all like new things. New is good. Old is bad. This "culture of the new" will lead employees to lavish attention on new customers while ignoring the old. (3)

2. "Lipstick on the Pig"

Customer strategies are not cosmetics. They must have substance. A pig with lipstick is still a pig......and customers know it. (1,2,6)

3. "Passion Loss"

Every company begins with a passionate entrepreneur with a good idea. As the company grows, the bean counters take over and the bottom line becomes the most important thing. The passion is lost. Without the passion, the product becomes a commodity and the company becomes vulnerable to the competition. (1,3)

4. "Real Cost of Cost Reduction"

There's no free lunch and there's no free cost reduction. Someone pays, and that someone is the customer. Cost reductions dilute the relationship with the customers. (3,6)

5. "Failure to Operationalize"

A customer-centered initiative must have a company-wide strategy. Without a plan, it's just a nice idea. (1,2,3,6)

6. "You Get What You Pay For"

Traditionally, employees are paid for productivity; quantity, not quality. If you don't back up your customer-focus initiative with a matching compensation program, employees will get the idea that it's really not that important. They believe that you're saying "This is not important to us, but we want you to volunteer to take care of this yourself." (5)

7. "Management of Change"

"Change does not happen by itself." Pepole don't like change. They're afraid of change. Management of change must be a key part of any new strategy. (1,2,5)

8. "Lack of Leadership"

Get out of your comfort zone. Company leadership must look at the business through the eyes of the customer. (1)

9. "Unstructured Relationship"

What is the long-term strategy for each customer? Do you have one, or do you make a sale and hope for the best? The author makes a strong case when he says that "In our research, we could not find a single well-documented customer plan detailing a two to three-year relationship." No company can survive without long-term relationships with their customers. It's amazing that this key fact goes unrecognized by so many companies. (1,2,3)

10. "Technology Shortcut"

Customer strategy does not mean buying a new piece of technology. That may be part of it, but the technology is just a tool. There are no shortcuts when it comes to building a relationship with customers. (1,2,3,4,6)


Read the exerpt here, and if you like it, you can purchase the book here. You can also subscribe to Peppers and Rogers excellent newsletter on their web site.

Monday, February 20, 2006

Free Agent Nation

Something that has been occupying my time is Daniel Pink's excellent book, Free Agent Nation. Dan is a former speech writer for Al Gore (but don't hold that against him). He spent a year traveling the country talking to people who have gone out on their own, to become independent workers, what he calls "free agents."

The book is a good read and it's quite interesting if you're an entrepreneur, or if you would like to be. I think you'll also find it interesting if you're a "traditional" business person. The trends that Dan discusses, for instance in taxation and education, should be of interest to everyone.

Dan has another new book called A Whole New Mind, which also looks interesting. It's next on my reading list. Thanks to Steve at Creative Generalist for pointing it out.

A side note, I ordered Free Agent Nation as an e-book from Amazon.com. This was my first experience with the format, and I have to say it has its advantages. I downloaded to book to my PDA so it was never out of reach. Whenever I had a few minutes, I would pull it out and read a few paragraphs.

The downside? You can't highlight or make notes in the margins. There were many times when I wished I had a hard copy.

Categories: , , , , ,

Employee Education

Here's an interesting article from the American Quality Mall web site.

While the article is aimed at retailers, the principles apply to any organization that deals with customers. (That's every business, isn't it?) Baldrige category 3 is about customer focus. Does everyone in your company know who the customer is? Do they know what the customer wants? Remember, customers can be both external and internal.

How much do you spend on training? Is it the right training? Has everyone in your company who interacts with the external customer received telephone training? This is critical. As the saying goes, "you only get one chance to make a good first impression." It's always been my feeling that the operator who answers the phone can do more good (or harm) to a company than anyone else.

You can spend a ton of money trying to attract new customers. If your people don't know what to do with the customer, then a lot of that money may be wasted.

Categories: ,

Creating Pull

From Joe Ely's "Learning About Lean" web log comes an interesting article on serving your customer. Regardless of the business we're in, we all have customers. This article illustrates how different Baldrige categories are linked. Category 3, Customer and Market Focus and Category 6, Process Management, come together in our efforts to create better ways to satisfy our customers, whether they're external or internal. Obviously, there are elements of all six process categories in play here and Category 7, Results, is certainly affected.

Something as simple as a Coke machine can teach us a lot. You don't think the major soft drink companies just stick their machines anywhere, do you? Years of experience have taught them where to put them, what to put in them, and how to merchandise the product. But, even giant companies have to continuously improve.

Read the artile here: Creating Pull, where there is no Pull. As Joe says, I hope this stimulates you to do some creative thinking.

Categories: baldrige, marketing, merchandising

Customer satisfaction is the key

In a March, 2005 article, Colleen Lent wrote in the Rockingham (Maine) News on customer satisfaction, number 3 of the Baldrige Criteria. She tells the story of a retail consumer's misadventures with a local department store. The details of the story are so familiar that they hardly bear repeting. To make a long story short, business gets customer; business loses customer; customer tells everyone he knows; business doesn't have a clue.

Lent quotes marketing expert Philip Kotler, who says businesses should:

Set up a complaint/suggestion system

Conduct surveys

Ghost shop

Conduct lost customer analysis

and for business to business organizations,

VISIT THE CUSTOMER (emphasis mine)

It seems so simple. But it it's so simple, why do many businesses fail to follow these steps?

(The article is no longer available on the web)

Categories: , , ,

Defining an exceptional business

A recent article from the National Federation of Independent Business points out four characteristics that define an exceptional business. According to the article based on the book, Built to Last by Jim Collins and Jerry Porras, those four characteristics are:

  • Exceptional businesses begin with, and are sustained by, a vision.
  • Exceptional businesses live their values.
  • Exceptional businesses think big.
  • Exceptional businesses experiment.
Not surprisingly, these four characteristics can be found in every Baldrige Award winning business. The writer points out that every Fortune 500 company was once a small business. Examples could fill several books, and in fact, they have. But the only business story we're interested is the story of our own business. No one can write that story but us.

An excellent beginning to that story would be to prepare an Organizational Profile as outlined in the Baldrige criteria. Honestly describing our business in five pages or less will definitely put us on the right track and provide a foundation for future improvement.

You can read the article here.

Categories: , ,

Thought for the day

If separation of church and state is such a good idea, why does Congress take two weeks off for Easter?

This is too good not to pass along


This is too good not to pass along. Posted by Hello

Wednesday, February 15, 2006

Why use the Baldrige criteria as a business model?



While the Baldrige Award was created to encourage companies to improve, it’s the improvement itself, not the prize, that’s important.

In fact, since the inception of the Baldrige in 1988, there have been roughly 1,000 applicants. In that same period, the NIST has sent out more than two million copies of the criteria. That’s 2,000 criteria books per applicant. It’s estimated that, on average, each book is copied once, making four million total. The criteria are also available for download from the Baldrige web site and available through forty-four state programs.

In other words, it’s not recognition that most companies are after. They’re using all those Baldrige criteria books as a business model; to improve efficiency, employee morale, and bottom line results.

The seven categories of the criteria are things that every company must do, and do well, to be successful. They are:

  • Leadership
  • Strategic Planning
  • Customer and Market Focus
  • Measurement, Analysis, and Knowledge Management
  • Human Resource Focus
  • Process Management
  • Business Results

The Baldrige criteria provide a framework for measuring how we’re doing now, identifying opportunities for improvement, and measuring our success.

SSM Health Care of St. Louis, who won the Baldrige in 2002 and has won at least one state award in every state where they do business, has one of the best mission statements around:

“Through our exceptional health care services, we reveal the healing presence of God.”

They were very surprised when the Baldrige feedback report listed this as an opportunity for improvement. The examiners wanted to know exactly what “exceptional” health care meant. What is it? How do you measure it? What do your customers think it is? What do your employees think it is? How do you know if you’ve achieved it?

It’s not about doing something extra, it’s about doing what we already do, only better.

The seven criteria provide a common language for benchmarking other successful companies. One of the requirements for a winner of either the Baldrige or the state awards is that they share their story with other interested companies. Summaries of each winner’s application are readily available.

What about the cost versus the return?

Thom Crosby is the CEO of Pal’s Sudden Service, a 2001 Baldrige winner. In an interview with Quality Digest he was asked to quantify the cost of winning the award.

“To do that, we put a dollar value to time plus the hard dollar cost. Basically, we can start the clock running in 1995. From 1995 to today (2002) we have invested just slightly more than a half million dollars. That includes improvement projects, and learning and application fees—even the money we put into celebrating wins. The return on this investment is one of the highest we’ve seen. We’re estimating the ROI at slightly north of 600 percent.”

Over eight years, they spent an average of $62,500 per year. Asked what that ROI figure includes, he said:

“We try to plot where we are today in sales and profitability and run a trend line that projects where we would have been without Baldrige. We have a long history of trims, and we look at that in relationship to each given year since we’ve been using Baldrige. We use our historical trend plus or minus what was going on within our industry. We’re talking about hard dollar returns: money in our pockets.”

Branch-Smith Printing, Dallas-Ft. Worth, won the Baldrige in 2002. Their business results include a 72% increase in sales over four years while the printing industry declined 6.6%. From 1998 to 2002, their customer base grew from 91 to 167.

Horst Schulze, president and COO of Ritz-Carlton was asked, financially, how expensive was getting your company to the Baldrige level?

“(Laughter) I think that's one of the biggest fallacies out there. I cannot even comprehend how we could afford not to be involved in improving quality. I can only say that since this improvement effort has begun, we reduced our employee turnover from 80 percentage points to the middle 20s, and that's in an industry that runs at around 100 percent. And with a labor force of nearly 20,000 employees, you can imagine how much money we now save. Turnover is very expensive.

“We also have considerably fewer defects in the organization than we used to. Defects are very costly. So I can't even comprehend how we could financially survive in our market without being in quality. It's an investment that has to be made. It also costs me to buy bed sheets, but I certainly couldn't live without them. In thinking of quality as an investment, there's absolutely no higher return on any of our other costs.”

I mentioned that SSM Health Care has won awards in every state where they do business, as well as winning the Baldrige. They actually began using the criteria as a business model before health care organizations were even eligible to compete. Do they think it’s valuable? Even though they’ve already won the highest award, every SSM entity is still expected to apply for their state award each year. SSM will apply for the Baldrige again in 2007, the first year they will be eligible again.

This year, two of their Missouri hospitals won the state award, Cardinal Glennon and St. Francis Hospital of Maryville. St. Mary’s Hospital, Mt. Vernon won the 2004 Illinois award.

In a speech to the NIST, Sr. Mary Jean Ryan, CEO of SSM, said,

“I've always maintained that the reason to apply for Baldrige is that it's the best way to get better faster. And having received Baldrige feedback for four years in a row, I can say without a doubt that it's the best thing SSM Health Care has done to improve as an organization.

”So let me describe what Baldrige has done for us at SSM Health Care. Baldrige has given us a framework, a focus, and discipline. First of all, in our applications, we had to be able to describe our large and complex organization in 50 pages, including results. This exercise gave new meaning to the word "discipline."

”In all honesty, Baldrige has helped us look at our organization in a very different way than we did in the past. Although our CQI culture was firmly established, our approach to improvement was scattered, so it didn't have the overall impact that it could have had. Baldrige has provided a new lens through which we see our organization. It has offered us a way to systematically evaluate our entire organization, and understand the link between the hundreds of processes that make up the health care experience.”

“The additional value of Baldrige as a business model cannot be overstated, because it offers a structured way to look at an organization. It asks very basic questions, but coming up with the answers is hard. . . And once we'd gone through a Baldrige application and received feedback, we saw our organization in a new light.”

“And finally, a financial result. In 1999, the first year we applied for the Baldrige, our St. Louis network lost $20 million. Well, since then, with many process improvements, SSM St. Louis has made a $50 million financial turnaround.

And for SSM Health Care as a system, we reported a positive operating margin of 3½% in 2003, compared to a negative operating margin of minus 2.2% in 1999.

David Spong is president of Boeing Aerospace Support. In his Baldrige acceptance speech he said:

“I’ll admit that in the beginning I was a skeptic. ‘Who has time for all of this extra stuff?,’ I’d ask myself. ‘I have a business to run.’ Ironically, that was precisely the point. We could run a decent or even a great business, but is that what we wanted? Why not strive for being the best?

“For those who don’t believe in Baldrige, I tell you this. Act like you believe, and eventually you will believe, because you’ll see great results.”

James S. Beard, President of Caterpillar Financial Services was interviewed in Quality Digest Magazine. He was asked:

QD: Is there any advice you can offer to other companies thinking about the Baldrige process?

Beard: We often repeat a quote John F. Kennedy made in relation to our space program: “We choose to do these things, not because they are easy, but because they are hard.” Our advice to other companies is to get in the game now. Don’t wait until you get better. The application process is hard, but it makes you better--it measures your progress, establishes a goal, disciplines assessments and provides invaluable third-party feedback. In the end, the use of the Baldrige criteria helped Cat Financial improve its financial results, better satisfy customer needs and become a better place to work for our employees.

What about your potential costs?

Thom Crosby gave a concrete figure of $62,500 per year for Pal’s Sudden Service’s efforts leading up to winning the award. In that figure, he includes improvement projects. Part of our mission is to “always find a better way”, to continuously improve. We’ve already decided to improve. We’re already spending money. The question is, what framework do we use to make the improvements?

The Baldrige criteria are a model, a map. They give a company a way to see where they are, where they want to go, and a way to get there. This type of approach to continuous improvement does away with duplicate efforts and false starts. It could actually save you money.

The Baldrige organization as well as the state award programs provide materials, training, and support at little or no charge. Award winners are required to share their experiences with interested companies. They’re proud of their accomplishments and like to talk about them.

Consider it an investment, rather than an expense. The evidence is there that money spent on improved processes yields high returns. Huge companies like Boeing and tiny companies like Stoner, Inc. (2003 Baldrige winner, 43 employees) have seen the investment pay off.

Next Steps

Continuous improvement is not something separate. Everyone “does quality”. Some just do it better than others. Take the time to review the criteria. Visit the web sites of some of the winners. Check out your state organization. Most offer on-line information as well as workshops and other training opportunities.

Consider applying to be a volunteer for your state program. You will receive invaluable training at little or no cost. If chosen as an examiner, you will have an opportunity to study another company in a way that would never be possible otherwise. While company-specific information is confidential, the lessons you learn from the process are not.

Most of all, remember that it’s not the award that’s important. It’s the improvement in the way that your company does business. We all “do quality”. Some of us just do it better.

Good stuff from across the pond

An organization called the Economist Intelligence Unit, based in London, recently completed a survey of over 4,000 executives. The topic was what will business be like in 2010? I don't know how much it costs to survey 4,000 people, but the good news is that whatever it cost, you can read the results for free. More good news, flexibility and speed will be key competencies for success.

While the big companies are trying to figure out how to be flexible and fast, we're way ahead of them. Most large corporations are rigid and slow.

I'm reminded of an airplane trip I once took from Atlanta to St. Louis. I happened to be sitting next to a riverboat pilot. What an interesting guy he was! He told me something that I didn't know and haven't forgotten. When two barges are coming toward one another, the one going downstream has the right of way. Why? Because they can't stop. The combination of momentum and the river's current means that it takes them a long time to change course. The one going upstream just has to "put it in neutral" and it will begin to drift backward with the current.

It's the same with business. Many of us have a tendency to get out of the way of the big guy. You would think that's an advantage for him, and it is. But on the other hand, what if there's trouble ahead. The lack of flexibility may just cause him to run aground. Think about it.

You can download the full report here.
Categories: , ,

Change This!

From Startup Journal, Bob Rosner writes about encouraging your staff to embrace change. Improving our businesses always involves change, and change isn't necessarily something your people look forward to. Whether you have 500 employees or your entire staff consists of your wife and your dog, change isn't easy. Rosner suggests five tips to help get employee buy-in.

  • Create a sense of urgency. You've got to get their attention.
  • Communicate a vision. If change will make things better for them, let them know.
  • Empower them to act. They'll be more enthusiastic.
  • Celebrate short-term victories. It doesn't have to be money. An "atta-boy" is often enough.
And number five may be the most important of all in our pursuit for business excellence.

  • Incorporate new approaches into the way you do business.
Deployment throughout the organization is the key to any process improvement. Does the change further the mission? If not, why are we doing it? If so, then it must be consistent from top to bottom.

Bob Rosner is the author of Working Wounded, a web site and internationally syndicated column.




Categories: , , ,

A Model for Business Excellence

A. Blanton Godfrey, chairman and CEO of Juran Institute Inc, writes on using quality award criteria as a business model. While the article was written in 1997, it's just as relavent today as it was eight years ago. He points out that many companies have no business model at all. Many others think they have one, but it's not written down. As a result, any attempt at improving the company's processes, and bottom line results, is viewed as something separate; an add-on.

To achieve quality results, quality must be integrated in everything we do, from the CEO to the part-time person who cleans the office and everyone in between. To be successful, a company doesn't "do" quality. They must "be" quality. There's a big difference.

The Malcolm Baldrige National Quality Award criteria have been developed and improved over a period of years. Each year the process is reviewed and changes are made. As a small business, you couldn't afford to buy the kind of experience and expertise that are part of the Baldrige process. Yet, it's available at virtually no charge from the US and most state governments. Winners are required to share their stories. A summary of each recent winners' application is available, either on the Baldrige web site or on the winner's site.

The criteria don't tell you how to run your business. Every business is unique and has its own strengths and opportunities for improvement. What they do is to provide you with a guide to studying your operation, asking the right questions to discover where you are, where you want to go, and how you're going to get there. If you never go so far as to enter the "official" award process, just the self-examination process will make you a better company.

If you haven't already, either order or download a copy of the Baldrige criteria. Read it over. Discuss it. Try to answer the questions.

The Baldrige web site provides tools for self assessment. Many of the state award sites also provide on-line help. See if you can prepare an orgainzational profile. It may well be the best time you'll ever spend on your business.

Remember, quality is not something extra, something that you will try for a while. It must be a part of everything you do.

Categories: , ,

Think you're safe from the world's largest retailer?

From Forbes Magazine, "NEW YORK - Wal-Mart Stores' 5,100 stores worldwide suck up $1.1 billion worth of electricity annually for air-conditioning and lighting. Now the Bentonville, Ark., giant has itself entered the power industry." That's right, the world's largest retailer is now buying electricity wholesale for use in its Texas stores. The article points out that while it's unlikely that Wal-Mart will enter the power business, there is nothing to prevent them from selling their excess electricity to consumers.

What next? Who knows? But consider this: no matter what business you're in, there's no reason to think that you're immune to price competition. As soon as you get big enough to be noticed, you're likely to become a target for a price-cutter.

So, what do you do? I would suggest that you must make your offering unique. You must be different. What features or services can you pack into your product or service that your customers just have to have? What is it that they are willing to pay more for?

Strategic Planning is the second of the Baldrige criteria for a reason. We must look into the future and decide where we want to be. Part of the process is looking at all the possible scenarios. Whatever your industry, is it possible that a mega-company may become your competitor? Or, through acquisitions and mergers, is there a giant competitor in the making?.

The recent merger of Federated and May department stores is sure to have a dramatic affect on the retail landscape. Did their competition consider this possibilty? I guess only time will tell..

Categories: , , ,

What can we learn from a ten year old?

Like the ant who moved the rubber tree plant, here's a story about a kid who had high hopes. Ryan Cenk, a ten year old Cub Scout from Richland, PA, decided he was going to set the record for selling the most popcorn during the Scouts' annual fund raiser. He did it with a vengance! The national record was $20,000 and the Pittsburgh area record was $5,000. Ryan sold $25,006 worth, or ten tons of popcorn, enough to fill one and a half U-Haul trucks. His biggest sale was to ATM Corporation of America, 450 cases or $13,500. The company bought the popcorn tins for employee Christmas gifts.

The manufacturer, Trail's End, is rewarding Ryan with a trip to Orlando where he will visit Disney World and speak to the company's national sales meeting.

Richland Cub Scout pops into fund-raising record book - PittsburghLIVE.com

Categories: , , ,

How NOT to save money

American Airlines has decided to remove the pillows from its domestic flights, saving $375,000 per year. The airline lost $761 MILLION last year. This HUGE savings, 1/2% of their 2004 loss, hardly justifies the discomfort and inconvenience of their customers, especially piled on top of the rest of the discomfort and inconvenience that their customers experience on a daily basis.

Pillows were removed from American's MD80's in November. An airline spokesman said, "We had some resistance from customers initially, but complaints dropped off." He went on to day that blankets would still be provided and that customers could use the blankets in place of pillows.

When complaints "drop off", it doesn't necessarily mean that customers are happy. It may mean that they're either so used to poor service that they've given up complaining, or it could mean that unhappy customers have just taken their business elsewhere.

USATODAY.com - American tosses pillows off most domestic flights

Categories: , , ,

Between full and empty


Am I the only one who cringes everytime I hear or see a commercial for Phillips 66? You know, the ones that end "Life happens between empty and full."

That may be true for oil company executives. But for me, life happens between full and empty. That's when I drive to church. That's when I take my wife out for dinner. That's when I go to visit a friend, or visit the sick, or go to a ball game. Good things in our lives often involve driving, and that's when the guage goes down, not up.

The only thing that happens between empty and full is that I stand there, inhaling gas fumes, watching the numbers on the pump spin at an increasingly obscene rate of speed while the dollars are sucked out of my wallet. That's life? I don't think so.

Categories: , , ,