FAMILY BUSINESS Owners Need to Develop Internal Customer Service By ERNEST A. DOUD JR. Taking care of the culture in a family business means cultivating an organizational environment that encourages success. Always remember: A going business is going because of its employees. Make your company a place where people want to work, want to excel, and are recognized and rewarded for their achievements. Much attention has been devoted to the importance of superior customer service. Making every aspect of your company “user friendly” for your customer is an important stepping stone on the path to business success. Here’s another interesting proposition: Your employees are your customers too. You know how much your business can suffer if you make things convenient for yourself, but inconvenient for your (external) customer. If your organization does not take care of its internal customers (the employees), they won’t be able or motivated to do a very good job of caring for the external customer. Here are some of the major factors that impact the quality of internal customer service. -Quality and Values Of Management and Supervision: It all starts here. The values of top management are easily picked up by immediate subordinates, and are quickly passed on down the chain of command. We’re all the same. Each of us is going to behave in ways we believe our boss will value. If you really value people, treat them with respect, and hold your direct subordinates to similar behavior, it will be reflected throughout the company. If you don’t … well, that will be reflected too. -Performance Management: There are always exceptions, but as a group: we want to know what is expected of us; we value having input to those expectations; we are willing to be held accountable for meeting agreed upon performance standards; we need timely and constructive feedback about our performance; and we’re anxious to improve. After all, our jobs depend on it. Many companies do performance appraisals that don’t lead anywhere? A good performance management process establishes performance criteria up front, regularly reviews measurable results, explores needs for improvement, develops action plans for making those improvements, and ends by establishing performance expectations for the next period. Anything short of that is a waste of time. A couple of other thoughts on this subject. First, make sure that family members in the business are included in the performance management process. They have as much need and right for guidance, improvement and feedback as do non-family member employees. Finally, for those who consistently fail to meet performance standards, if you’ve taken all the steps suggested above and have not met with success, you have done a responsible job of laying the groundwork for definitive disciplinary action. -Systems, Policies, and Procedures: When I was much younger, I once went to work “undercover” in a factory as part of a consulting assignment. The first thing I encountered was a guard standing under a sign that read: “No admittance without proper identification and safety gear”. The catch was that to check out the safety gear, I had to first get into the plant past the guard who was instructed not to let anyone in who didn’t have it. Don’t take anything for granted. Review your systems, policies and procedures to make sure you aren’t creating impossible (or even unnecessarily inconvenient) situations for your employees. -Recognition and Reward: In many businesses, criticisms are a dime a dozen and compliments are as rare as hen’s teeth. Recognition is one effective (and inexpensive) way to build a positive organization climate. Look as diligently for successes as for failures, and never underestimate the motivational power of a public pat on the back. If recognition by itself is a motivator, just see what happens when you mix in a reward system. Select behaviors and outcomes that spell success for your business, measure performance, and reward exceptional contributions to better than expected results. Cash is always nice (see below), but be creative. Your options are virtually unlimited. An extra paid day off, a dinner for the employee and his/her spouse (with babysitter costs thrown in), a name and picture on a plaque in the reception area, a preferred parking place for a month, a write-up in the house newsletter. -Performance-Based Incentive Pay: As a business owner you have a right to expect a fair return on your investment. Once that rate of return is exceeded, consider sharing the “excess” with the people who helped make it possible. The annual year-end bonus that is tied to nothing but your generosity has little motivational value. To be blunt, it is a waste of money in most cases. To realize a return on your investment in additional compensation, make it meaningful by tying cash incentives to pre-established performance measures. Ernest A. Doud Jr. is the managing partner of DoudHausnerVistar, a consulting practice focusing on assisting clients to successfully manage family/business dynamics. Listen to Customers, Suppliers to Keep Up In Competitive World “Common sense is not an acceptable substitute for tradition.” Years ago, fresh off of active duty in the Army, I went to work for a company that exemplified the real implications of that saying. The founder was an inventor, craftsman, and in a way a bit of an artist. He had invented a product and built a business around it. The trouble was, his customers were changing their ways and new and better technologies were rapidly rendering his product obsolete and overpriced. Dave’s company became one of the statistics on family business failures. One of those 70 to 75 percent of all family businesses that never make it to the second generation. When you look at that statistic, keep in mind that many of those businesses fall victim to the same dynamic. Common sense is not allowed to prevail over tradition. Here are five things you can do inexpensively that can make an important difference. First, listen to your customers. Make sure you are aware of even gradual shifts in their needs and preferences. Second, talk with your suppliers. They are tapping into the same markets, and for much of the same information. They are not different than you really. You both want the products and services you provide to be in tune with the demands of the ultimate consumer. So suppliers can represent a good source of market data. But you have to ask the right questions. Third, keep a close eye on your competitors. I don’t mean you should always copy them, because that assumes that they are right and you are wrong. Fifth, do a good job of the external diagnosis portion of your strategic planning process. Your future success depends in large measure on the assumptions you make about the external environment in which you operate. Ernest A. Doud Jr.
