Front Cover

Back Cover

I hope to have a “galley proof” in my hands by the end of the week. After that, a few final edits and we begin printing. I hope to be able to announce the book for sale by the end of this month, so keep watching here for the announcement.

The book will be for sale on my web site and you’ll have the option to get an autographed copy if you prefer.

Stay tuned!

I  have been busy completing the details on my first book (click here) and have been working like a one-armed paper hanger in a hurricane behind the scenes on my second book– a book I am tentatively calling “The HVAC Territory Manager’s Field Guide.”  (My editor may suggest a better title, so for now, this is a working title.)

I finalized the paperwork on the contracts over the weekend, and we should be in print in about 90 days +/-, so expect it to be ready in mid-June of this year!  (Just in time to help rescue your career from a worsening economic nightmare…)

This is going to be a huge book– the manuscript is 564 pages long!  It will also have a CD-ROM as part of the project, and there will also be a Sales Manager’s Guide (on CD-ROM only) for sales managers who wish to take their sales teams through the process.

Here are the chapter titles for now…

CHAPTER 1: WHAT IS YOUR JOB?

Overview of what it means to be a territory manager

CHAPTER 2: MAXIMIZING YOUR INCOME

How to do the things best for which you get paid

CHAPTER 3: WHAT IS YOUR TIME WORTH?

Determining how much you are worth per hour; and then, why would you do stupid stuff with your time when you are worth that much?

CHAPTER 4: RULES OF THUMB

Quick ways to determine key averages and performance indicators for dealers

CHAPTER 5: TERRITORY ANALYSIS

Simple ways to analyze a territory and build a sales plan

CHAPTER 6: TERRITORY FORECASTING AND PLANNING

How to forecast sales, expenses, margins and profit and then build a plan to achieve these

CHAPTER 7: THE TYPES OF CONTRACTOR

Commercial, residential, service, low-temp, and so on– how are these business segments handled differently by successful contractors?

CHAPTER 8: THE LIFE CYCLES OF A CONTRACTOR

How contractors change as they go through their life cycles and what you can do to be of the greatest value to them at every step along the way

CHAPTER 9: HEY, IT’S A BUSINESS!

Understanding the fundamentals a dealer has to know– how to run a successful business (no TM is born with this knowledge)

CHAPTER 10: FINDING NEW DEALERS

How to recruit to find diamonds and rubies, not lumps of coal

CHAPTER 11: HELPING CONTRACTORS DEVELOP AND MATURE

How you can bring what a dealer needs to his party to help him grow and earn his business

CHAPTER 12: ACCOUNT SEGMENTATION

How to organize your accounts along logical lines and differentiate your sales calls with those classifications

CHAPTER 13: KEEPING SCORE

Tracking the numbers; what and how, and why!

CHAPTER 14: GOT DEALERS?

How many dealers do you need to achieve a given sales goal (such as share of market or dollar level)?

CHAPTER 15: BASIC CONTRACTING FINANCIAL MANAGEMENT

The HVAC business by the numbers; what every dealer needs to know (and most TMs don’t)

CHAPTER 16: KNOWING YOUR STUFF

Being the right balance of subject-matter expert and resource versus being useless to your dealers

CHAPTER 17: INFORMATION MANAGEMENT

How you pass information up and down the channel to help all concerned; how to leverage technology to get more done face to face

CHAPTER 18: DOING THE GRIND

Seeing to the details of the job– finishing the paperwork, dotting the i’s, crossing the t’s

CHAPTER 19: SALES REVIEWS

How to survive a sales review!

CHAPTER 20: MARKETING AND ADVERTISING

Can you speak audience ratings?  Column-inches?  Gross rating points?  You need to if you are going to be of great marketing help to your dealers

CHAPTER 21: SALES SKILLS—THEY AIN’T WHAT THEY USED TO BE!

The old days of feature/benefit selling and trial closes belong in museums; learn the new low-key way to persuade dealers to take action.

CHAPTER 22: DEEP COMMUNICATION, THE KEY TO AMAZING SALES

Reading people beneath the surface and unpacking their decision processes so you can influence their decisions

CHAPTER 23: DISPUTE RESOLUTION

Problems are going to arise; how do you handle them effectively?

CHAPTER 24: DOING A GOOD SHOW

Showmanship and presentation finesse– it’s what separates the territory makers from the order takers

CHAPTER 25: PRUDENT ETIQUETTE

Know when to walk away and when to dig in and get involved

CHAPTER 26: EXPENSE REPORTS AND THEIR ROI

The ever-present pain in the neck of expense reports and why you need to track them carefully

CHAPTER 27: TIME MANAGEMENT

The first myth of time management is that it exists.  Learn how to manage yourself to be effective in the now.

CHAPTER 28: GETTING YOUR SALES MANAGER TO WORK FOR YOU

Your boss should also be your greatest coach and helper; use him (or her) to make big gains

CHAPTER 29: MENTORING THE NEXT WAVE

Doing what you can to prepare the next generation (or, if you ARE the next generation, doing what you can to shorten your learning curve)

CHAPTER 30: IS SALES MANAGEMENT IN YOUR FUTURE?

So you think you want that corner office and those nice little perks?

The book will retail for $79.95, but once the publisher has the order form up on his web site, I’ll be offering pre-printing deals for volume orders.  Stay tuned for that in a future blog post!

]]> http://www.lodestarconsultinginc.com/one-step-closer-to-the-tm-field-guide/feed/ 4 http://www.lodestarconsultinginc.com/just-in-case-you-think-youre-normal/ http://www.lodestarconsultinginc.com/just-in-case-you-think-youre-normal/#comments Thu, 14 Jan 2010 17:33:58 +0000 Richard Harshaw http://www.lodestarconsultinginc.com/?p=669 It’s been a while since I last posted to my blog.  The end of 2009 was hectic!  First, my desktop computer hard drive decided to start decomposing on me, so I had to scramble and get a new desktop (and wow, what a machine!  1 Terabyte HDD, the newest Intel chip, so fast that when I enter data, I get the answer YESTERDAY!  Thanks to Chris Long at Computer Troubleshooters in Phoenix for putting it together for me.)

I then decided it was time to go ahead and get a new laptop as well, so I got the latest Lenovo Think Pad.  The thing is so fast and powerful, it can launch and guide a rocket to Alpha Centauri!

Both have Windows 7 (in my opinion, a VAST improvement over XP and a huge improvement over Vista).  However, there is no upgrade path from XP to W7 (there is from Vista to W7), so I had to install all my software again, etc, and that took a few weeks.

Anyway, I’m back for the year, and ready to go.

So here’s my first blog post for 2010.  You ready for this?

Normal???

When you were a little kid, did you ever wonder if you were “normal” compared to your classmates?  Maybe some were taller than you—a lot taller.  Or smarter. Or better looking.  Or better athletes. Most kids, at some point, wonder how they compare to everyone else. It’s normal.

We never outgrow that tendency.  Even as adults, we wonder, “Am I normal?”  We look at others, the houses they have, the cars they drive, their appearance, and we wonder, “Is that the way it is ‘spozed to be?  ‘Cause I ain’t that!”

Every five years, the US Department of Commerce, in cooperation with the Census Bureau, undertakes a massive study of business in the United States.  They look at dozens of industries, including Plumbing and HVAC. The last survey was done in 2007, and the data just recently became available. I will report to you what the data showed for the average US HVAC contractor in 2007 (adjusting for inflation since 2007) so you can see if you are “normal.”  (By the way, being normal is not necessarily a good thing.  How much would people jeer at you if you put on the side of your trucks, “ABC Heating— Man, Are We NORMAL!”

The average HVAC shop had 10.64 employees in 2007.  (I wonder what 0.64 people looks like?)  Half the shops are bigger than that, half are smaller.  (And we are talking about roughly 100,000 shops.)  A breakdown by size shows this:  1-4 people (58,039 shops); 5-9 people (19,295 shops); 10-19 people (12,242 shops); 20-49 people (7,638 shops), and over 50 people, all the rest (3,255 shops).  There are a ton of small shops out there, and only a relative handful of “mega houses.”  If we graphed this data, we’d have a sharply dropping line that ran from a high on the left to a low on the right.

Yet the sales data is completely different. If we look at the total sales racked up by each size bucket, we find that the curve would have a hump in it, like a camel’s back.  The 1-4 man shops account for only 10.5% of the sales (but are 58% of the shops), while the 4-9 man shops account for 13%; the 10-19 man shops rack up 17% of the sales; the 20-49 man shops tally 23% of the sales; and the rest of the family brings in 36.5%.

The average payroll per shop was $495,293 (which amounts to about $46,550 per employee).  Of that, 69% went to direct labor.  Fringe benefits came to $148,158 per shop (30% of pay).

The average shop in 2007 had $1,737,275 in sales.  This amounts to a throughput average of $163,247, a marked increase over 2002 (which one would expect considering the 2006 change to 13 SEER as the minimum efficiency standard).  Equipment and material ate up 37% of this and subs about 9%.  The average shop spent $60,488 per employee at the supply house to get equipment and materials.

Gross margins averaged around 46% in 2007.  (So if the average dealer wanted to make 12% net profit, he’d need to divide costs by 0.42.)

Sadly, the average shop only spent about $11,105 on advertising (less than 1% of sales!).  The data did not indicate whether this was before or after co-op dollars, so I’ll assume it was net (after co-op).  Even at that, there is not enough going towards advertising to sustain the average shop’s hunger for leads.

I don’t have the net profit figure for 2007, as the way the Government reported the data made it very murky to extract, but I would imagine that if it followed historical trends, it was below 3%.

Now here is what worries me— this data was all compiled before the Great Recession of 2008-2010 hit.  I suspect the numbers have gone south across the board, but we won’t know for a while.

Make sure your tray tables are in their upright and locked positions, that your seat backs are fully up, and that you have securely fastened your seatbelts. I think 2010 may be a very turbulent year for the economy in general and our trade in particular.

One thing is certain— the definition of “normal” is going to change, and those who are below normal will probably become fossils in the bedrock of our industry.  Does that make you sit up and start to want to manage your operation better?

Mr. Drucker’s writings are not normally common fodder for most small business people because he wrote primarily about large business (the Fortune 500 and similar classes of company) and most small business owners don’t see themselves in the same light as the corporate behemoths Drucker spoke of.  But Drucker actually had a lot to say that is good for small business too!

Drucker had the ability to write about complex and abstract concepts, but also to put real-life feet under them and make them pragmatic (a real rarity, if you spend much time reading the HBR or other similar publications).

Drucker wrote in the 1980’s, for instance, that allowing executive pay to get out of control (where the focus was on taking excessive risks to reap possibly huge short-term gains) would lead to economic disaster for those companies who practiced it.  (AIG, Fanny-Mae, Freddy-Mac, Leiman Brothers, Goldman Sachs… the list goes on and sounds very familiar, does it not?) That is because Drucker believed in principle-based management, something from which American big business today seems to have drifted.

He bemoaned Detroit’s reluctance to change and adapt to the new world realities and since his death, we have seen the near-collapse of GM and Chrysler.

He warned of emerging industrial competition from the third world, and no one listened, until now America lags behind China and other industrial comers in annual output.   (When was the last time you bought a TV set made in America?  Or shoes, or even a shirt? Oh, they can still be found, but it is getting harder and harder, isn’t it?)

More Drucker-isms for small business: “If I put a person into a job and he or she does not perform, I have made a mistake.  I have no business blaming that person.”  (“How to Make People Decisions”, HBR July/August 1985).

Or this: “Asking, ‘What is right for the enterprise?’ does not guarantee that the right decision will be made.  Even the most brilliant executive is human and thus prone to mistakes and prejudices.  But failure to ask the question virtually guarantees the wrong decision.”  (“What Makes an Effective Executive”, HBR June 2004).

To quote Rosabeth Kanter (“What Would Peter Say?”, HBR November 2009), “Drucker was not a revolutionary.  He merely asked that we constantly challenge assumptions.  He preached steadiness and long-term vision.  He recognized that leading in turbulent times requires foresight about where things are heading as well as judgment about what not to change.  He would remind us that the best preparation for a smooth journey, even as we steer across troubled waters or leap across chasms, is a clear sense of meaningful purpose.”

There is rising optimism that 2010 will be a year of moderate recovery.

I don’t share that optimism.  Recent articles in the Wall Street Journal, for instance (lead stories of Tuesday, Nov. 19, 2009 and Tuesday, Nov. 24, 2009) combined with the fact that in 2010 the five-year ARMS that were sold in 2005 go up (and these are for the most part jumbo loans) has me thinking that the last half of 2010 will be as bad as the end of 2008, maybe even worse.

I hope like heck I am wrong, but my reading of the tea leaves does not give me much confidence in our ability to climb out of this government-made hole.  Now more than ever we need the wisdom of dead sages like Drucker and Deming.

Get their books while you still have time and read them, then act on what you learn. It just might save your business in 2010!

In the 1990’s, I became interested in a concept called open-book management and had the opportunity to attend a seminar at a company that was a pioneer in this field, Springfield Remanufacturing Company, located in Springfield, Mo. The plant manager and CEO, Jack Stack, had written a book called The Great Game of Business which described their approach to beefing up the financial literacy of their employees, and I decided I had to see if this stuff was really true or just hype.

Springfield Remanufacturing (you can check their web site at http://www.srcreman.com/homepage.htm) is in the business of remanufacturing diesel engines for large trucks and tractors and do about the best job of it of anyone in the country. I don’t know if they still offer the monthly “open book management” seminars like they did in the 1990’s, so if you want to check them out, you may have to call them.

My experience over the 3-day session I attended was amazing. Here you have a manufacturing plant that employs several hundred people, most with only a high-school education, and everyone on the shop floor knows the key numbers every week! Each week, the department managers gather at the central offices for a half-day recap of the business for the past week. Each manager divulges to the others the numbers his department reached (not just production numbers, either— we’re talking financial numbers as well!). If he or she is not on track to meet the mutually-agreed upon business plan the team put together at the end of the prior year, they had better have an explanation, because any person in the meeting (not just Mr. Stack) can grill a speaker if the data is not on track. (And man, did they!) After the meeting, the department managers take the results of the meeting back to their departments and hold mini-meetings where they share not only the department’s financial performance but the company’s as a whole.

So why do they do this? To build a more profitable company. As Jack Stack writes in his book, “When you appeal to the highest level of thinking you get the highest level of performance.” Gee, such a nice, warm and fuzzy platitude, the kind of thing Pollyanna might say. But is it real?

My experience blew me away! As part of the Great Game of Business Seminar, you are allowed to tour the factory floor and talk to any employee you wish. Any question is legitimate. I paused at one station where a 30-something woman was putting the final touches on diesel fuel injector nozzles. A small part, a pittance as they might say in England. I asked her, “What do these injectors cost?  Do you know?” (Thinking I had her!)

She walked over to a shelf near her station and pulled down a 3-inch thick 3-ring binder. She turned to me as she opened it and said, “What week?”

Surprised, I said, “Oh, any week. You pick.”

Then she said, “Do you want to know our cost, the cost to the reseller, the cost to the end user, or the cost of the raw materials? Shall I include burden too?”  I just shook my head and chuckled, “Never mind! You know this like the back of your hand, don’t you?” She replied proudly with a smile, “That’s my job, mister!”

Major decisions about capital outlays are not made by senior management— they are approved by management, but not planned or made by management. That is the job of the floor people.

Case in point: employees are taught to watch the balance sheet like a CSI studies a crime scene. One year, the peoplein the shipping department came to management with a request for a new super-duty fork lift truck—a beast that could handle engines that weighed thousands of pounds. They said the ones they had were not big enough to handle the largest engines by themselves—that they had to rig two trucks together to move the biggest stuff in a ballet that almost defied choreography. Management replied, “Have you run the numbers yet?” They replied, “No.” Management said, “Well, do so and bring us back what you find out.”

A week later, the shipping department team came back to the weekly management meeting with the forecasts, projections, and what-if scenarios all worked out. It turned out that the move would put a serious ding in plant equity for a while (and since the employees get a piece of the equity pie, that is serious business!), but in the long haul, it would increase productivity more than enough to eventually offset the investment. As is the case with large outlays like this, the matter was brought to the factory floor for a vote. Employees looked the situation over carefully, weighing their loss of equity (and hit to their year-end bonus checks)  for the long-term gains in productivity— and voted to buy the new truck. Senior management then authorized the purchase.

Now compare that to the typical HVAC company, where often not even the owners know what is going on financially. How often do they get their financial statements? And when? If they don’t get them monthly and by the tenth of the month prox, they are in a fog. And they need to get three reports (income statement, balance sheet, and cash flow statement). And they need to go over them line by line with a CSI’s UV light and look for any clues of fiscal anemia and take countermeasures.

And let alone the crazy and burn-me-at-the-stake thought of the employees knowing the monthly numbers! Heresy!

Yet let me ask you a question: if you are an owner of an HVAC business, you probably have found out by now that these things are a whole lot more trouble than raising babies. Babies just wake you up at night sometimes and crap on you sometimes, but a business can keep you up all night and bury you in crap. You probably did not bargain for all this, did you? So what if your former employer (you know, the one who inspired you to go off on your own and start your own gig) had shared with you and the rest of his employees the monthly numbers and taught you what they meant? What if they had showed you how your contribution (or lack of it) impacted the numbers (and not just the bottom line— the equity too)?

If you had seen those numbers then, would you have started your own shop later? Maybe. Maybe not.

I’m not saying you need to hand out your normal income statement at a monthly meeting— you can condense it down a lot (instead of showing  how much Mary at the front desk makes, just lump her compensation in with all the other office staff and show a line “Office Wages”) and make it simpler to read. But you do need to share the numbers with your people and explain to them what they mean and how their activities affect those numbers.

“But what if we’re having a slump?” someone will say.  “Won’t that scare them?”

Maybe. And perhaps it should. But it should also show them that slumps are normal and that by working together, they can be survived. And they can learn that their daily activities really do impact the company’s finances, maybe more than they thought.

And if you give them a steak in the outcome (I used “steak” on purpose rather than the normal “stake”), they might amaze you!

I will be adding a new departmentalized income statement worksheet tool to The Shop area soon. It includes an option to print a simple 1-page income statement for use in employee meetings. Check in later to see if it is posted yet and get a copy for your shop.

NOTE: For other great insights on open-book management, read John Case’s two books, Open-Book Management and The Open-Book Experience. To that list I would add Charles Coonradt’s The Game of Work.

But I am a proponent of a written business plan for any small business.  It’s just that it needs to be short (no more than 10 pages) and as wordless as possible.  Which is why I have become a fan of Michael D. Ames, a professor of business at California State University (Fullerton). He wrote a paper titled “Rethinking The Business Plan Paradigm” (you can download a PDF copy here.

In a nutshell, Ames advocates a practical approach to business plans, not the stuffy MBA format so popular with bankers and professors. He states that plan must focus on just three elements:

1) Processes.

2) Revenue generation (“throughput”).

3) People.

Let me elaborate on these three points as they touch upon an HVAC business.

1. The plan must focus on your processes. Often in a workshop, I will have a contractor come up to me during a break and show me his P&L and ask, “What’s wrong with this?” I usually reply, “The gross margin is weak and the net profit is pitiful.” He then usually asks, “How do I fix it?” I reply, “I don’t know!”

He usually looks at me like I just slapped him with a cold large-mouth bass. I go on to explain that their numbers are the results of what they do day in and day out—their processes. I cannot tell them how to fix their P&L until I know how their processes work (and don’t work).

So how are your processes?  Lean and efficient, or wasteful?  Address broken or lame processes in your business plan.

2) The plan must improve your revenue generation (“throughput”). Throughput is how much in sales you do per employee. The national average right now is around $163,250 (but this varies a lot from state to state and even county to county).  Take your total sales (either last fiscal year’s or where this year will probably end up) and divide that by your total employee count. That’s your throughput.  If it is above $163,000, you are already doing well. If below that line, find ways (through process improvement) to raise it.

3) The plan must have people at its heart. Whatever your plan spells out, you must remember that if it is going to happen, it has to happen with the help and involvement of your people.  This is often where the traditional business plan breaks down.  The best-laid plans of mice and men will crash if there are no people pulling at the oars.

So let’s combine this into a single driving statement to help an HVAC business owner create a simple but powerful business plan:

Write a plan that focuses on process improvement by using your people more effectively to raise your throughput.

Get with your top managers off-site for a day or so and ask yourself The Big Question: Why do we have the problems we do?  Hint: the first answer you get won’t be the right one.  You need to learn how to drill down to the true answer. Use the Toyota Five-Why method—ask “Why?” over and over until uncover the real cause. (You’ll be there in five cycles or less.) Focus on fixing that real cause, not the smoke screens that hide it.

As you identify the real causes of process paralysis, focus on cures that (a) your people have the talent to achieve, and (b) make it possible to sell more with the same (or fewer) people, thereby raising your throughput. Then write simple statements that identify the cause, how it will be fixed, and who will be responsible for it. Attach measurable milestones to each element of the plan so you can track progress.

Such a plan would address perhaps 3 or 4 real causes (maybe up to 7, but don’t go beyond that—you’ll get so confused with all the changes that you’ll lose your way) and take maybe 10 pages to write.

Write it, print off copies, give them to every employee with an assignment in the plan, review it with everyone involved, and then go do it—and measure the numbers month by month to see if you are making progress.  If not, revise the plan. If you are, enjoy it—and get ready for a big tax bill at year-end!

I use a rule of thumb to bring home its horrible cost.  I call it the UT RULE (which stands for the unbillable time rule) and it goes like this:

If you have typical unbillable time in your company, it could be costing you 2,000 times the net hourly pay (with benefits) of your field people!

For this rule, typical means that 15% of the installer’s day is unbillable, while 30% of a service tech’s day is unbillable. (These figures come from ACCA and other trade groups who annually survey their memberships.)  The complete proof of this rule is not complex, but it takes up more space than I want to devote to it here.

Let me take a holly stake and drive this point home to your heart. Suppose you have 6 installers (making, on average, $25 each) and 3 service techs (who average $30 each).  Benefits normally run about 1/3 of the wages, so you are looking at $32 per hour for installers and $40 for service techs.  If your shop runs the typical unbillable time rates, your total costs could be $32 x 2000 x 6 people or $384,000, plus $40 x 2000 x 3 people or $240,000, for a combined hit of $624,000 a year.  Do I have your attention yet?

So how do you trim away some of the unbillable time?

Here’s a laundry list to get you started:

• cleaning the shop— charge to janitorial account or to the job which created the mess
• cleaning the truck— charge to vehicle maintenance
• running errands— charge to the job errand is for; charge to office supplies account or other special function accounts; if personal, do it on your own time
• helping unload equipment/supplies/materials— charge to the job shipment is for; for general inventory, charge to warehouse account or unapplied time
• labor for robbing parts from another unit— charge job the part was for; charge to the parts labor account (if you have a parts department)
• labor for chasing down out of stock parts— improve inventory; otherwise, charge to the job part was for; have parts delivered by delivery service
• “customer not at home” service trip— review dispatching procedures; bill customer a minimum charge; get credit card numbers up front and bill card
• callback caused by technician not fixing it first time— this is a legitimate cause, especially with less-experienced techs; bill such time to the training account and log the problem so training can be done on that issue; send the original tech on the 2nd call; if a 3rd call is needed, service manager goes with the tech as a tutor; and NEVER send another tech to do the callback for the original tech
• shop time when there are no calls to run— market service so you stay busy; sell and do service agreements; send men home when there are no calls
• have service techs wear tool belts or carry a small tools briefcase—then when they go to the equipment, most of what they will need will already be there
• have installer trucks loaded the night before or pre-dawn hours by a part-time worker—this can save ½ hour or more per installation crew (that’s one man-hour a day) in wasted time
• have service techs run their first call from their homes—lots of time is wasted when they come to the shop in the morning to fill out paperwork, replenish parts, and chat

Finally, use daily time cards that have codes for the type of work being done, one of those codes being “U” for unapplied.  Explain that the tracking of “U” time is not to discipline the men but to wake management up to wasteful practices.  If the shop does better economically, all the people who work in it do too!

First, a superb sales rep (I’ll use the acronym SSR from here on out to save my fingers some wear and tear on my keyboard) knows that you create the pool of profits from which everyone in this business drinks. You, of course, derive your livelihood from what you do, but so does that sales rep and the company he works for.  The factory that supplies that distributor with equipment depends on the profits YOU generate.  The suppliers to the factory (metals, refrigerants, motors, etc.) depend on those profits too.

Because of that, an SSR will focus all of his or her efforts on you and your business. Like a waiter in a five-star restaurant, an SSR will be so devoted to you and your success that his employer may sometimes wonder who he works for—you or the distributor!  An SSR will go more than the extra mile to help you and your business succeed.  Because of that, an SSR will learn this trade so he or she may help you in EVERY area of your business.

An SSR will possess strong business skills, helping you develop and write a marketing plan that will help you generate leads, and then help you learn how to convert those leads to appointments and then to sales at high margins, keeping your installers busy almost all year and attracting the kind of business you are looking for.

An SSR will help you write a business plan that will help you grow safely and strongly for years to come.

An SSR will help you find, hire and keep excellent installation and service talent so you have the people to do the jobs you need to do quickly and right the first time.

An SSR will call upon you often enough to be a key partner in your business, but not so often as to become irritating, and will always be just a phone call away, 24/7.

An SSR will know his or her product line inside and out, frontwards and backwards, and will know how to help you apply that product line to any job you encounter.

An SSR will be a good communication conduit between the factory and distributor and you, passing vital information up and down the line as needed to keep all parties in sync and productive.

An SSR will be a leader among leaders, calling out and developing the best in you and your management team.

An SSR will be a team player, throwing the ball when asked, blocking when required, even carrying the water, all to help you score big.

In short, an SSR can be one of the most important elements in your successful business and will only fully enjoy his or her success when you enjoy yours.

If that is the kind of sales representative you have calling on you, thank your lucky stars.  If it is not, maybe it’s time to look around and try to find one. Feel free to drop me a note to discuss it.

It really does take two to be Number One!

Ally, Mickey and my Wife

Last week, the wife and I accompanied our daughter and son-in-law and our two grandchildren (Luke, 16 months, Alexis, 8 years) to Walt Disney World in Orlando, Florida for a vacation and birthday celebration (Alexis turned 8 while we were there).

Several observations about WDW:

1.  Florida is humid. Very humid. For me, one who is used to the dry desert heat, Florida was worse than a clam bake, with me as the clam. After walking only 50 yards, my shirt was soaked.  I wish Mr. D had decided to build his park near Phoenix—but then, it would have been only 5 hours away from Disney Land in the Los Angeles area, and that would have been a poor move from a business sense.

2. While much of the Disney magic is still evident, these hard economic times have hit Disney too. There were signs of delayed or cut-corner maintenance in our hotel and many of the waiting line areas did not have ventilation fans to cool off the patrons. (In Arizona, we use misters and fans to cool off people outdoors, but in the Florida humidity, misters would do no good whatsoever.)

3.  Certain parts of the older parks (Magic Kingdom, EPCOT) showed signs of wear, such as flaking paint, rust, cracks and the like.  On my last visit, in 2003, the park was pristine in every way.

Despite these small signs of economic stress, the staff— Disney calls them “cast members”— were true to form and exceptional in their friendliness and helpfulness, always exhibiting a cheerful attitude to all who came to them with questions or problems.  They are truly the best in the world at what they do.

And the Disney Magic is still there in huge quantities! For example, in the Magic Kingdom, the evening “Electric Parade” has now become the “SpectroMagic Parade”, but it still features Disney characters in LED-lit costumes and floats and my grandchildren were spellbound by it, as I was!

For Ally’s birthday, we ate at Chef Mickey’s (in the Contemporary Resort) and we were a little late due to bus transfers. As we were seated, our waiter came by and said, “Alexis, I have been expecting you! Happy birthday and welcome to Chef Mickey’s!” She was  stunned! Then, as we were nearing the end of dinner, we were visited by none other than Pluto, Donald Duck, Minnie Mouse, and, of course, the most powerful mouse in the world, Master Mickey himself! Alexis was in shock to meet them, as was my wife (a huge Mickey fan). Minnie Mouse even kissed me on the cheek. I have not washed it since.

One night, we took Ally to Cinderella’s Castle for dinner. Part of the package included a picture of her with Cinderella, with which she was awesomely impressed, but she did not know that we had dinner reservations. She had said all day that she wished she could eat there. Well, the photos are taken in a large anteroom before you ascend the stairs to the dining hall, and every few minutes, a royal page would enter the room with an official strut and utter in a loud voice, “Lords and Ladies of the castle, Cinderella requests the [NAME] party to be her guests at dinner. Princess [NAME] / Prince [NAME], will you accept?” We told Ally that we had to be invited by Cinderella to her dining table and she got a sad look. But a few minutes later, when the royal page announced our invitation to dinner, she could not believe her ears and her eyes grew as large as saucers!  She ran over to Cinderella and asked, “Could you eat at our table tonight?” Cinderella, carefully coached on how to handle all possible interactions, smiled with the grace of a true princess and said in fairy-tale voice, “I’d love to, my dear, but tonight I am dining with Prince Charming.” It worked.

I stopped by one of the caricature artists at the Animal Kingdom one day and thumbed through his book of backgrounds, looking for a telescope, but found none.  I said, “Can you do a sketch with a telescope in it?” He replied that he could, and he produced the sketch you see here. I have already scanned it and put it into my personal business card and have asked my astronomy club newsletter editor to use it instead of the “Uncle Sam” graphic we have used for the last few years for the President’s Corner section.

On the last night at Disney, Ally lost a tooth! Imagine her joy and surprise when she awoke the next morning to find a certificate signed by Tinkerbell herself at the foot of her bed, with fairy dust (glitter) running on the floor all the way to the door!

It never ceases to amaze me that a company has built a $100 billion dollar-plus empire out of a vermin-carrying rodent! But that is the Disney Magic.

I was privileged in 2003 to sit in on a seminar where the Disney HR department trainers taught us how they prepare the cast members for their jobs. Each cast member, be it a lowly janitor (the most trained cast member they have, by the way, since that is the one position most folks turn to for directions or help!) or the girl who dons the Minnie Mouse costume is given at least two weeks of training and orientation using what they call the Disney Compass.

The Disney Compass is a concept every business could use. Imagine a compass, like you use for finding directions. It has four main points—N (north), W (west), S (south) and E (east). In the Disney training system, these four points stand for cardinal virtues of what the Walt Disney Company stands for.

N is Needs. Everyone, they are taught, has needs. You have needs.  I have needs.  All God’s children got needs.  I need food, and water, and air, and shelter, and transportation, and so on. So do you.

W is Wants. Everyone also has wants. You have wants, I have wants, all God’s children got wants. I need food. I may have to settle for hamburger, but I might want prime rib. I need clothing. I may settle for a suit from J. C. Penney, but I might really want a $5,000 Armani original. I need a car. I may settle for a Honda Civic, but want a BMW. The list goes on.

What separates a need from a want, asks the Disney trainer? Money. We turn our wants into reality by trading enough money to satisfy them.

For the average Disney visitor (family of four) that means about $3,500 on a typical visit (counting transportation, hotel on the Park, meals, and extras). Disney also knows that their average patron comes back every 3.7 years (or so— the numbers may have changed a little since 2003).

So how does Disney get people to come back every 3.7 years and drop $3,500 every time they do?

By going to the S and E compass points.

S is Stereotypes. Disney does a superb job of inspiring their cast members that Disney Parks are not the stereotypical theme park. They are in a league all their own. I have to agree. I have been to many theme parks over the years, and none of them hold a candle to Disney. Disney is cleaner, Disney is more attuned to detail (witness the  hundreds of “hidden Mickey’s” in every Disney park, for example), Disney people are more pleasant to deal with (even in unpleasant situations) than any other park I have ever been to. I was told by the Disney trainer that led our seminar that Walt Disney World proudly has 17,000 janitors on the payroll. We all gasped, and then he told us that EVERY cast member is expected to pick up any loose trash he or she sees as they walk about their daily duties, and that even included the Disney CEO at that time, Michael Eisner. Disney tells their cast members that they cannot build repeat business at $3,500 a pop on a “me-too” park experience, and they really succeed at that!

Finally, E is the most important part of the compass. It stands for Emotions. Disney teaches their cast members that if they don’t touch the emotions of every guest that enters the park every day, they will not build the bond that brings them back every 3 or 4 years.

How good are they at touching the emotions of their guests? Let me give you an example.

We took our daughters (Sara, the one who went with us this trip, and her younger sister Julia) to Disney World in 1987 when Sara was 11. (At that time, Disney only had two parks: The Magic Kingdom, and EPCOT. Now they have five!) At that time, the Magic Kingdom had the Electric Parade at night with its cute (if not eventually annoying) little parade theme music. About halfway through the parade, as Pete’s Dragon was passing us, I felt a tug on my arm. It was Sara and she looked up at me and said, “Daddy, when we go home tonight, can we stop at the gift shop and get the tape with this music on it?” I said, “Sure, sweetheart,” and we did—at $19.95 for a cassette tape, at a time when you could get a Michael Jackson tape for $9.95! (We listened to that tape all the way home from Orlando to central Missouri…)

Now fast forward the film to 2002 and Sara’s wedding. When she had the wedding party enter the reception hall for the reception, she had the DJ play— well, would you believe she had the DJ play that Electric Parade theme song?

Think about it!  Disney had so ingrained itself into my little girl’s emotions at age 11 that on the happiest day of her life as a young adult woman, she played their music to celebrate her wedding. Wow!!!

What if every business did a stunning job of touching every customer’s emotions that way?

Better yet, what if your business strove to live by the Disney Compass? What could that do for your sales and success?

The Idiot Son (Heir Apparent-- NOT)

The first thing you need to determine before bringing a son or daughter into the business is, Does the child really want to be in the family business?  Ask this question of the child some time when you have thicker skin than normal.  I think that many parents foist their family businesses off on their children the same way they force their kids to be involved in soccer, Tae Kwan Do, scouting, equestrian arts, debate clubs, and the like. (A lot of kids in those “mom’s taxi” situations really don’t want to be doing all that stuff.)  If they don’t, have the courage to open your hand and let that little bird fly to some other tree.

If they do, you next need to ask, Do they have the smarts and guts to do it? If not, don’t make them the president some day.  Give them a job, yes, but don’t give them more responsibility than they can successfully handle or grow into.  If you overstep their reach, you will only hurt them in the long haul and probably destroy what you worked so hard to build.

Third, treat your kids in the business no different than you would any other employee. This sounds easy (or hard, depending on how you see it), but you cannot be easy on them because they are the heir apparent, nor can you be extra hard on them to make them tough to run the show when it is their time.

Nepotism can have a devastating effect on company morale when the other employees are not family members!

Having said all that, my advice is to click here to download a PDF file titled “Family Members in the Business.”  It is yours to use as you see fit.

Bottom line: If the kid(s) can do it, bring them in and prepare them for the Big Job.  If they can’t, bring them in as employees, but find someone else to turn it over to.  And if they don’t wanna, don’t make ‘em.  You’ll probably damage your family as much as your business if you do!