davidpoulos.com

Category: Vision

  • Does More Pay Equal More Value?

    Does More Pay Equal More Value?

    There has been a lot of talk recently regarding and considering CEO compensation, especially in the financial sector, where the numbers compared to the average person’s income are literally astronomical. In my mind, it comes down to contribution.

    Some companies are so well-constructed, that you could put almost anyone in the corner office and they would continue to run things profitably. Some are so inherently dysfunctional, that the most brilliant leader would founder in the effort to right them and run them logically and practically. But the average firm can benefit from strong leadership to set the tone, strategic direction, and operational efficiency that leads to success.

    Typically this is a seasoned individual, with a good education, a strong network of colleagues and contacts, and enough political awareness to work his way into the job. There are some, especially in the tech sector, that don’t seem to fit this mold, but the vast majority of brick and mortar, bread and butter companies have an executive vet at the helm, one who is compensated handsomely for their work. But what do they really contribute on a daily basis?

    Some lead by example, and therefore contribute as a role model and exemplar just by arriving and communicating within the headquarters office or division facility. Some lead through growth strategy implementation, working with M&A attorneys, brokers, bankers and business owners to grow the company through strategic acquisition of other firms, either to help shore up weaknesses within the firm’s core competences or expand into new affiliated or related markets. Some lead through mentoring, employee relations and succession grooming within the ranks, training and educating younger executives to move through the company with the goal of one day paying back that investment by leading the firm to greater profitability.

    Those may seem like intangible approaches or qualities, but they contribute in numerous ways to the success of the company. In the case of some of the more high-profile financial firms, I’m not entirely sure the millions and in some cases billions that the CEO receives in compensation is proportionate to their contributions to the firm. In some cases, reported ad nauseum in the media, the same executives responsible for driving the profitability out of the firm are the ones now reaping even greater rewards, while the stock holders and general public flounder trying to make ends meet.

    There has been a theory advanced that the CEO shouldn’t receive more than ten times what the lowest paid worker receives. For manufacturing companies that outsource production work to third-world countries, that compensation could be very low indeed. While the mechanics of the theory need some fine tuning, the sentiment is borne out of an innate sense of fairness, an internal gauge of “rightness” and correctness that we all possess when assessing such things. If you still go to the same office I do every day, do basically the same work, maybe among a more wealthy group of people, do you really deserve 100 times more than I do in compensation for it? – not likely.

    Someone ought to do a correlative study cross-referencing the national journalists list of the top 100 best companies to work for, against the top 100 highest compensated CEOs, and see if there is a correlation between compensation and how the workers rank the company. My guess is the correlation would be rather low, and here’s why. Companies that are “Great” to work for usually provide a wide range of outstanding personal benefits, ranging from free child care to extra days off, to paid education, to personal loans, to flexible hours or work-at-home options to help better balance personal- and work-lives of the employees. Those benefits sometimes have expenses attached to them. Places where the CEO is extremely highly compensated are driven by profitability and sales volume, rather than work-life balance for the rank and file – different motivators, different cultures, different definitions of the word “Company”.

    Let us know what your definition of the word “Company” is from a cultural standpoint and whether yours is a “great” place to work, and how much your CEO is compensated, and we can compile the results and see if our theory holds water. Can’t wait to hear from you . . .

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  • Sometimes you want to go . . . where everybody knows your name

    Sometimes you want to go . . . where everybody knows your name

    Everybody wants to be wanted, or at least recognized. I have a few places where they know me on sight when I walk in the door, but that kind of permanence and stability has been rare, especially since I grew up outside the Nation’s Capitol, where there are very few “natives” and the population is extremely transient. Too, I went to a very large university in Boston, where much of the student population was composed of commuters, so the typical school experience was very different, more focused on studying and less on social life, especially after dark, when a majority of the student body left for their own homes in the suburbs.

    Business relationships are often like that, too: you meet, you greet, you follow up, maybe even work on a project or several, and then drift apart. Relationships like anything else have to be nurtured and tended to in order to survive and thrive. The relationship with your customers is just that way. It takes effort to nurture them and to keep customers aware of you and to keep your business top of mind.

    Marketing can do that for you, but it must be sincere, and it must at least appear as much as possible to be PERSONAL. Your customers are humans, whether it’s B-to-B or consumer market, and they deserve to be treated as such. Good marketing, especially direct mail copy, should appear to be written specifically to YOU. That DOESN’T mean you just use the word “you” a lot in the copy – there’s an art to it, and if you’re not feelin’ the art, have a pro write your copy for you – its worth it.

    Customer service is often as simple as answering a question quickly and accurately. It can go as far as going above and beyond and addressing a long-standing problem and turning that complaining customer into an evangelist.

    I was the recipient of some tremendous customer service last night, at a business networking mixer, at the Intercontinental Hotel here in Baltimore. There is one place where they know me when I walk in the door, and this is it. Before I had gotten through the lobby into the bar proper, the top notch bartender, Elizabeth, had my “usual” beverage prepared for me, ready to go without me asking or even looking in her direction.

    Now in reality, I have only been a guest there about 6 times in the last year, but it’s always for the same event, the same time of day and the same day of the week, and our schedules collided on a regular basis – but she took the time and energy to remember after just a few small interactions who I was, what I looked like (winter and summer mind you, no identifying scarf or coat to help) what I liked to drink, and how I liked to get the evening started.

    Terrific! Kudos to Elizabeth for taking the initiative and providing outstanding service – and kudos to Arpad and the staff at the Intercontinental for realizing that sometimes employees need to be empowered to go above and beyond to REALLY please customers, and for allowing them the latitude to do it. I’m sure preparing a drink before the customer asks isn’t in the InterContinental’s policy book, but Elizabeth knew that I would be pleased and she was right. Thank you.

    Write about your good customer experiences here, be glad to pass them along . . .

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  • Economy Down, Scammers Up

    Economy Down, Scammers Up

    Over the last few years I’ve seen quite a bit of questionable e-mail come through my in-box, and most of it goes right back out to the Recycle bin. The pleas from various quarters of the globe to “give me millions in exchange for your help in parking this money in your account for a few months” type, the “I’m the ousted prime minister of a small nation and have gotten out of the country with millions but need your help to get it into the US” type, the I’ve inherited millions from my Irish uncle but need your help to get it into the US” type, and a host of other scams, including so-called “phishing” sites, e-mail that drives you to sites that look like a bank, and they ask you for your account information to “verify” your account – actually a bogus site set up to capture your banking info.

    It all sucks, and plays to our greed. One business I know of got their event registration system gamed and hacked by some folks in Nigeria, who registered for events using a fake card number, and then registered for a refund, which would be paid for with a real check out of the company’s account – small change one at a time, but as a block, it adds up to some real money. That company had to go so far as to set up a special escrow account for all Nigerian registrations, that would be sequestered from the rest of the funds until all the credit cards cleared, and refunds issued only from that account.

    As the economy goes through it’s ups and downs, scams like these seem to proliferate when things are just starting to get a little brighter. They seem to work best when there’s a little glimmer of hope for those who receive them. They play on our “get rich quick” mentality, one that pervades the lower income brackets, where one big score can break you into a new lifestyle very quickly, so if there’s a tiny fraction of a chance of it being legitimate and paying off, folks will take the risk.

    It may seem a little Pollyanna-ish of me, but what if those Nigerians used that insight into the human psyche, their ability to manipulate emotion with words ( in a non-native language, no less) and their skill at finding lists that respond, for good rather than evil? What if those guys applied those skills to some of the languishing products or brands out there dying for a boost in sales, how effective could they be? What if they took the time used to concoct these schemes and set up the infrastructure to run them, and used it to brainstorm a way out of the housing crisis, solve the oil spill problem, or the employment problem?

    America is the land of opportunity, and someone ought to provide these folks an opportunity to put their skills to good use for the good of the country in general. They of course would have to be monitored and supervised very closely, but so do half the employees I’ve ever worked with. Maybe a government marketing and scheming think tank ought to be set up, to harness the brain power currently residing in our prisons. With roughly 5% of our adult male population currently incarcerated, there’s much to be learned and shared behind those walls, and we’re wasting a resource that our nation could be using to advance our position in the world. If those folks are smart enough to figure out a way to game a system the size of the banking system, or the stock market, then problems like renewable energy, low-income housing, tax reform and national debt ought to be a piece of cake.

    Write and tell me your best idea for fixing a problem you’ve recognized that would need government backing to carry out, and I’ll collect them and publish the most likely one’s here for all to see.

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  • Do You Work At A Mickey-Mouse Company?

    Do You Work At A Mickey-Mouse Company?

    With young children in the house, I’m constantly inundated with Disney products. They take on various forms, from movies, figures, puzzles, games, toys of various types, books, clothing, accessories, and much more. Disney’s tactics and areas of approach may have changed over the years, but the basic strategy of engaging children with a good, wholesome story with a subtle lesson incorporated hasn’t changed since the 40’s, when the original Mickey Mouse cartoon launched. The amazing thing I’ve observed, and something to be emulated, is the ability they demonstrate to stay within the brand across all products, services and efforts. From the movies, to the theme parks, to the lids on the cups and the towels folded in fun shapes in the hotels on the property, the Disney brand is present, noticeable, and consistent. That’s where a large portion of its power comes from, and as business owners we can all take a lesson from Walt’s vision and discipline.

    From humble origins in a single sketch of a rough-looking rat, through full blown animated movies, to theme parks and attractions the rival the world’s fair, the brand has always held to a set of recognizable characteristics. From the cups in the concession, to the castings of Toy Story movie figures, the level of quality and value is consistently high, the materials top notch, the safety and functionality of the highest levels possible. Colors are vivid, paints are bold, facial features are easily recognizable and well molded. The imagery in the animated films is beyond sharp, the movements incredibly smooth and lifelike, the surfaces artfully captured and rendered. But it’s the story and the characters that really show the brand’s core.

    Disney’s vision has always revolved around a story. From Snow White, to Cars 2, there is an innocent, wondrous quality to the characters, untainted by current events and the world around them, but somehow reflecting the cultural touchstones that poke out of the firmament around each film. The plot has a point, and usually teaches several lessons in courteous generous, or well-mannered behavior. The way characters treat each other is a tremendous model for kids to pattern after, and the story’s outcome reinforces the importance of treating others well leading to a good outcome.

    Business marketers could take a page or two from Disney’s book, in terms of brand continuity, consistency of voice, and maintenance of high standards of quality and service. Everything they touch carries the brand proudly, including the employees. From the tram driver at the park in Anaheim to property manager at the prime hotel in Orlando, each strives to go beyond the call of duty and actually SERVE customers, to rise above expectation to make them happy.

    Do your employees do this each and every day, with each and every customer of yours? Are your products the highest quality they can be, every time, and recognizably so? Are your marketing efforts telling the right story, one that engages potential customers, charms and enchants them into understanding your value and acting in a loyal and generous way as a result? If not, you’re not really working for a Mickey-Mouse outfit, like you thought . . .