The best way to improve your score is to keep score in the first place. This is the case because of the often quoted truism, “What gets measured, gets done.”

Therefore, if you want to create a more successful organization, you need to do the following:

1. Define success (goals).
2. Decide how you are going to compete and win in the marketplace by being different in order to achieve those goals (strategies).
3. Determine your key organizational processes that are mission critical to executing your strategies and achieving your goals (critical success factors).
4. Drill down to the team or even individual level to determine departmental or individual key function deliverables that need focus and attention to achieve excellence in your critical success factors.
5. Document objective measurements that will drive your scoring system to determine if you are generating a winning score at the activity level in your organization.
6. Tabulate and communicate your scores to all of those involved in a timely manner as appropriate.

We suggest utilizing an organizational scorecarding system to accomplish the above 6 objectives and a few more as well. 

Success in business is a function of two variables–planning and focus & execution. No organization can reach its full potential without a healthy dose of both of these inputs. 

Scorecarding incorporates both of the disciplines of planning and focus & execution. There is planning involved in all 6 steps itemized above. The scorecard that you create as a result of those 6 steps creates a focus & execution tool for your team. 

Your teammates still have to provide the personal discipline to physically and mentally focus & execute, but at least the organization has done their part to clearly communicate in no uncertain terms what the organizational expectations are for the individual or team and how that relates to the overall organizational objectives.

I mentioned above that the scorecard can be used for more than just a communication tool relating to six steps in the planning process. An example of this would be that some of our clients use the scorecard to also reinforce communication of the organizational values as well.

Please tell us about the tools that you use to keep score and drive success in your organizations.

We would love to hear from you!

I just finished listening to Malcolm Gladwell’s current book “Outliers: The Story of Success.” I am happy to report that I have finally found the equivalent to the Fountain of Youth; the shortcut to success. 

Our Blog is named Somerset Success Strategies. However, I only occasionally remember to really think about success itself. In one of my prior periods of reflection, I realized I had never defined the word the entire Blog’s existence is predicated on; success. This led to a three part series beginning last August relating to John Wooden’s definition of success and his Pyramid of Success.

During another such episode, I asked for and then received Outliers as a Christmas present. I have been meaning to get around to listening to Malcolm’s new book ever since. Malcolm never disappoints, and I could kick myself for waiting this long to enjoy it. 

But here is the really interesting part; Malcolm’s book does not contain the shortcut to success.  Quite the contrary really, he actually describes how much effort and luck goes into success. He goes to great lengths to describe how our culture, ancestry, economic circumstances and birth date dramatically influence our chance for success. Even in the one area where we are in control of our own destiny, the result of Malcolm’s research sets the bar very high. It turns out that we need 10,000 hours of perfect practice to reach the mastery of a single subject.

However, Malcolm’s book does get credit for being the inspiration for the discovery of the shortcut to success. A light bulb turned on as I contemplated the requirement of 10,000 hours of prefect preparation for skill mastery. I realized this is why people will pay for franchises, cookbooks, sports coaches, math tutors for our children, etc. These are the ways we pay for a shortcut to success by leveraging off of the mastery that someone else achieved the hard way by putting in their 10,000 hours.

So the path to success is simple. Start by defining success for you. Then either put in the 10,000 hours of perfect practice that is required to achieve the success you define or purchase a shortcut through the use of someone else’s system, recipe, pay for coaching, etc. Of course, as Malcolm points out you will also need a dose of luck along the way. In addition, some of us have more obstacles to overcome than others, so individual results will vary to some degree.

So all of this leads me to the following question: If you are a business owner, a member of a management team or if you aspire to become either one, have you put in your 10,000 hours of perfect practice as it relates to the business of business? Not practicing what your business does, but practicing how to run a business that does what you do. Being a plumber and managing a plumbing business require two very different skill sets.

In the likely event that your honest answer to the 10,000 hour question is no, then you have a choice. You can make up the rest of your 10,000 hours by the sweat of your own brow.  Or as an alternative you can tap into the leverage of the shortcuts available via the Somerset Success System programs and resources available at http://www.somersetconsultants.com/. 

Somerset has mastered the process of how to become successful in business. We have not done this because we are smarter than anyone else. We have simply institutionally put in our 10,000 hours of perfect practice at the business of business and now have offered our accumulated knowledge as a leverage point to others who desire a shortcut to becoming successful in business.

Also, please keep in mind that shortcut is a relative term. Regrettably, there is no silver bullet. Even with the leverage of the Somerset Success System, you and your management team will have to supply your share of the effort. You cannot bypass putting in some of the 10,000 hours yourselves. In addition, all the while you will be working through our system that helps you work ON your business, you will also need to continue to work IN your business at the same time. This role of player/coach that we all have to play in the small to middle market segment is another reason that even with the leverage of the Somerset Success System, the entire process will take approximately two years from start to finish.

Our goal at Somerset Success Strategies is to help your company create happiness and build business value. So if your organization defines success in this way; we hope you consider this Blog part of your shortcut to success.

Please add to the leverage that we can all receive from each other by posting comments relating to your favorite recipe for success.

We would love to hear from you! 

Today’s post comes from a guest to our blog, Jeffrey A. Magginnis, Vice President-Business Banking at Key Bank. Jeff provides us with the major highlights of SBA changes in the stimulus bill:

With the American Recovery and Reinvestment Act of 2009, there are some significant changes related to the Small Business Administration that every business owner should know about. A total of $730 million was set aside for the SBA specifically. Here are some highlights that affect lending programs specifically:

• $375 million has been set aside to temporarily eliminate the fees to borrowers and increasing the bank guaranty from 75% to 90% for banks. This change is in effect until the end of the year or until the funding runs out.
• $255 million to help small businesses meet their current obligations (this program is not fully defined yet, but should be soon).
• $30 million for the Microloan program.
• Other money to beef up staffing for expected increased volume, technology, etc.

More details can be found at www.sba.gov/recovery/index.html. 

In addition, some rule changes went into effect on March 1; the most important being that the ability to refinance existing debt has been made easier than before. I consider this change and the roll back of fees to be very significant in helping small businesses restructure and reposition for the future.

I would recommend setting an appointment with your banking partner to discuss your current situation and see if any SBA lending makes sense. Even if it does not, having a conversation with your banker to understand the current environment is crucial. As I have stated before, banks are still lending. What has changed is that the rules have reverted back to prudent lending practices.

We thank Jeff for sharing this information on our blog. Jeff can be reached at 317-399-3072 or jeff_magginnis@keybank.com.

I was listening to Malcolm Gladwell’s current book, “Outliers: The Story of Success,” when it became apparent that I had erred in my post titled “Creating a Culture of Community” back in December (link below). This kind of thing does not happen to me often, but I am man enough to admit when I am wrong.

http://somersetblogs.com/2008/12/19/creating-a-culture-of-community/

In that post I made a big deal not just about the importance of culture in business, but about a very specific kind of culture that you want to create in your organization called a culture of community. It turns out I was dead wrong.

I massively underestimated the importance of creating not only a strong culture in your business, but specifically a culture of community. It is at least 100 times more important than I implied. As a matter of fact, your very life depends on it; both the quantity and quality of your life as it turns out.

How can this be? Well in Outliers, Gladwell retells the story of The Roseto Mystery. The executive summary of the The Roseto Mystery is that in the 1950s a physician by the name of Stewart Wolf became aware of a medical mystery happening in the small village of Roseto, Pennsylvania. During that time period, heart attacks were an epidemic in the U.S. Yet, rarely did anyone in the town of Roseto under the age of 65 suffer from heart disease.

Wolf conducted an exhaustive study and concluded that the urban legend about the lack of heart disease in Roseto was in fact true. Further as it turns out, the Rosetans were dying of only old age and nothing else!

This led to an additional intensive study to determine the underlying cause of this phenomenon. They ran through the usual suspects–diet and exercise, genetics, regional bias, etc. In the end the only reason that held up under the microscope of rigorous scientific analysis was that the Rosetans’ longevity both in terms of quantity and quality was due to the unique culture of community within the village of Roseto.

Now it is true that we can create this Roseto effect in our time outside of work. We can strive to make our residential communities more Roseto like. But, if a culture of community is so directly linked to the quality and quantity of our longevity, then why stop there. Why leave our health and happiness to chance. We will likely spend from 1/3 to 1/2 of our adult lives at work, so the type of culture we create there will have an indisputable and significant impact on our overall quality of life.

With this new evidence and emphasis on the importance and impact of a culture of community, I urge you to re-read and apply the principles I shared in my post back in December on the best practices I have found for creating a culture of community.

Please share with us your best practices for creating a culture of community.

We would love to hear from you!

I was at a meeting with a prospect last Friday. I asked why they were thinking of changing vendors. The prospect listed the following three reasons.

1. Their current provider’s cycle time from inception of the project to the delivery of the final product was too long - Timeliness.
2. Their current provider was routinely taking more than 24 hours to respond to normal ongoing communications all throughout the year - Responsiveness.
3. Their current provider did not adhere to agreed-upon pricing - Surprises.

As I listened to my prospect, I remarked to him that I have been hearing this same story as I have prospected for new customers over the last 25 years. It never ceases to amaze me how simple business really is vs. how complicated we tend to try to make it.

Twenty-five years of history from the 80’s through the 90’s and into the 21st century, through economic feast and famine, through incredible technology and regulatory changes, through globalization, etc., and still always the same three reasons why businesses change vendor relationships:

1. They simply want timely delivery of their products and services within an agreed-upon and reasonable time period.
2. They simply want us to respond effectively and efficiently to their inquiries routinely on an ongoing basis.
3. They simply want to understand the price of the products and services they are purchasing, and they do not want any surprises.

This really does not seem to be too much to ask, nor does it require any superhuman people, knowledge or effort. As Tony Dungy says, you simply need to be willing to do the ordinary better than anyone else. 

All that is required are simple, clear and efficient product and service delivery systems, perfectly ordinary but highly-disciplined people willing to do the ordinary mundane blocking and tackling of business predictably, consistently and reliably everyday and in everyway and the right business metrics to make sure you are staying on the right track.

This brings me to the only 4 questions that really matter. An important part of your management information system should be some way to measure and monitor your ongoing customer service levels.  This can be accomplished with a simple annual customer survey that has only 4 questions:

1. Did we meet your expectations for timely delivery of your products and services over the past year?  Yes or No
2. Did we meet your expectations for timely responses to ongoing routine inquiries during the past year?           
   Yes or No
3. Did we meet your expectations as to the cost of our products and services in relation to the value that we provided during the last year?
   Yes or No
4. Based on the above, will you proactively recommend our company to others during the coming year?           
   Yes or No

Please note that the answers are simply yes or no, they are not a scale of 1 to 5 or other qualitative type scoring. This is on purpose. There is no scale, you either met your customer’s expectations or you did not.  It is black and white. 

What would be a good score? Well, if you received 97% yes answers, then you would meet the statistical definition of average quality. Average U.S. business quality results in 3 defects per 100 opportunities for defects.

What would be a world class score? Six Sigma quality results in 3 defects per million opportunities for defects, so I would suggest your ultimate goal would be to get to an average yes score of 99.9997%.

Business really is simple. Please tell us about your short list of questions that prove it.

We would love to hear from you!

I sat down today with the intent to counter the effect of my last post, Sell Starbucks Short. You can learn a lot from what businesses are doing wrong, but it is not as positive as learning from the masters. In general, I want this Blog to be a positive place, but I just could not help myself at the time.

I am a couple of weeks removed from my bad experience at Starbucks and the stock market gods threw me a bone with last week’s rally, so I am a little more positive all the way around. In addition, the Obama Administration has decided that the worst is over, so I guess all that we have to fear is fear itself.

As I mentioned in my last post, I am not in the habit of giving investment advice. However, I would recommend that you buy Ted Drewes stock if you could. It is a privately-held company, so the best we can do is buy into their business philosophies.

First things first, what is Ted Drewes? It is a frozen custard stand. OK, big deal, that is a very crowded marketplace. So why the subject of my post?

I took my family on a weekend trip to St. Louis, MO just last month, February of 2009. My daughter wanted to see a national tour of a Broadway play that was making a stop there at the Fabulous Fox Theatre. On Saturday night we enjoyed a great traditional Italian dinner in The Hill neighborhood. We were traveling with three 15-year old girls, so predictably they wanted ice cream after dinner. 

I remembered the Ted Drewes custard stand from a trip we made through St. Louis a few summers ago, so I wondered aloud to the adults at the table if it was open this time of year and, if so, how you would get there from The Hill. The couple next to us apologized for eavesdropping and then informed us that it was indeed open and how to get there.

We got to Drewes around 10pm on a cold and windy Saturday night in February. Did I mention that it is an outdoor old-fashioned custard stand? Is spite of this, the place was packed. The first good news was that the stand was well staffed and efficient, so we did not wait in line very long. 

My second favorable impression was that when my wife told me how much money she needed I thought she had a decimal point in the wrong place. I was buying for my wife and two teenage girls, and they had all purchased what Drewes calls a Concrete. It is basically the same kind of thing as a DQ Blizzard. 

When Stacey gave me change back from my $10, I thought I had died and gone to heaven. I actually went to the menu on the side of the building to double check, and each Concrete was in the $2.50 range. This was for what they called a “small,” but everyone had all that they needed and some to share; there would be no logical reason to order a larger size.

Please check out their website to learn more about Ted Drewes and its history:  http://www.teddrewes.com/

Now, this is a fine story and all, but why is it so important?  Ted Drewes is practicing what we now call a Blue Ocean Strategy. Of course, it did not have a name when Ted Sr. opened his first custard stand. The Blue Ocean strategic planning model teaches that you can follow a high differentiation strategy and a low-cost strategy at the same time.

This is important because of the distinction between Ted Drewes frozen custard and Cold Stone Creamery and Dairy Queen. Cold Stone Creamery and Dairy Queen follow the traditional strategic planning theory that you have to choose a highly differentiated product (Cold Stone) or a low-cost strategy (Dairy Queen). If you follow this traditional model, all this gets you is a smaller group of competitors, but you still have competition. This is now referred to as a red ocean strategy. Cold Stone competes with other high-end options, and Dairy Queen competes with McDonald’s and others.

If you follow the Blue Ocean Strategy of low cost and high differentiation like Ted Drewes, you compete with no one! I would not want to be the Cold Stone Creamery or Dairy Queen franchises in St. Louis. If you simply take your family to Ted Drewes, you get the Dairy Queen price with the Cold Stone style product.

Now, how can you accomplish this feat and still make money? You simply reduce or eliminate costs in areas that don’t add to your unique customer value proposition and then increase or create value in areas that do. For example, Ted Drewes has a high-traffic location on old Route 66, but it is not a high-cost retail location. This works fine for the Drewes model because they are a destination for family fun so they don’t have to be at the mall with the rest of the retail players paying full boat rent. They also do not have indoor seating so they have less square footage needed for their buildings in general. 

What really makes this a sustainable strategy is that the Drewes family does not just pocket all of the occupancy savings. Instead, Drewes invests some of the money it saved on location costs into a superior product without having to charge a higher price for it.

Bottom line, Ted Drewes is selling things that have no competition, never go out of style and are recession resistant; efficient and friendly service, low prices and a differentiated product.

Please share your customer service based stock tips with us.

We would love to hear from you!

I am not in the habit of giving investment advice. In addition, I am a card carrying member of the Starbucks tribe and spend around $1,000 per year with them.  However, I was compelled to write this post because of the following random events that all came together in the last week: 

1. I provided customer service training as part of our Somerset Practical MBA program so customer intimacy was top of mind.
2. I read an article in Business Week indicating a link between above average customer service scores and above average stock performance.
3. I was subjected to a remarkably bad customer experience at Starbucks.
4. The economy is in the tank and I am in a generally all around surly mood.

It all started out innocently enough. I was at a shopping mall with my wife over the weekend. We had lunch and then I wandered into Starbucks for coffee.  Imagine my shock and dismay when I was told that Starbucks will no longer provide decaffeinated coffee on demand after 12 noon. The Barista suggested that I could have a decaf Americano or she would be glad to make a pot of decaf coffee especially for me but it would take several minutes. 

I opted for the Americano. Why? For at least a couple of reasons. First, I am an American and therefore do not like to wait. Think if I had been in the drive-thru where the whole idea is fast service when you are on the run. Secondly, for the most part, human beings do not like to impose on other humans. So even though she suggested she could make a pot of decaf sincerely enough, I would normally not ask her to do that just for me.

The decaf Americano was almost $3; the decaf coffee that I usually order is less than $2. Adding insult to injury, I do not like Starbucks Americanos as they are too watery for my taste. All I really wanted was a cup of decaf coffee at a Starbucks; that didn’t used to be too much to ask in life.

The more I thought about the experience, the more outranged I became. I realize that I should chill out and get a life. I know there are starving people in Africa, etc. But I am obsessive-compulsive by nature, and I genuinely love my Starbucks decaf in the afternoons and evening.

As I reflect on my experience, several things about this policy make no sense to me:

1. First, I only drink decaf after noon and know a lot of people who do the same.
2. Starbucks’ primary reason for existence is that it is a coffee company, and decaf is one of the staples of the coffee drinking crowd. To me this would be like Baskin-Robbins saying that they won’t serve vanilla ice cream after noon.
3. Starbucks has historically been very sensitive to the overall customer experience. This is why Americans have been willing to spend two times as much for coffee there vs. McDonalds.

In an attempt to be fair, I have tried to walk a mile in Starbucks’ shoes to understand their strategy. I was told that they throw out too much decaf in the afternoons and evenings. This is a valid business concern from an operating cost standpoint. It also may have environmental implications because of wasting water, electricity, coffee beans, etc.

However, I have to say the solution they arrived at in halting on demand brewing of decaf after noon lacks innovation, creativity and customer focus. This sounds like the typical brainstorming idea that would come from bean-counters. Now here I mean accountants, not the literal coffee bean counters at Starbucks. I know what you are thinking, but I can take a shot at accountants since I am one.

How about brew smaller pots of coffee? How about brew it by the cup in a one cup coffee maker? How about you cut costs and your carbon footprint in other areas of your operations?

The last area I would ever cut costs in business is where it impacts the customer value equation directly as in the case of being able to get decaf coffee at a coffee shop. I highly recommend that in the future Starbucks run ideas like this past a customer advisory board made up of loyal members of their cult. This should keep them from continuing to shoot themselves in the foot.

Please share your customer service based stock tips with us.

We would love to hear from you!

In our last post, Lessons from a Massacre, we described the organizational lessons that can be derived from the plot of the movie “The Texas Chainsaw Massacre.” One of the really fascinating aspects of the movie is that there are also multiple organizational lessons to be learned from how the movie was originally filmed, produced and distributed.

1. Sell too much equity too soon.
The original creative force for the movie was supplied by Tobe Hooper. He sold a 50% interest in the film initially to raise the $60,000 he thought it would take to film and produce the movie. The problem was, as is often the case, it took more time and money to make the movie than he had anticipated. We use a rule of thumb that has proved pretty useful over the years that says to plan on everything taking twice as long as you think it will and costing twice as much as well.

2. Then sell most of the rest of it out of desperation and end up with no control over your own destiny.
Hooper used the $60,000 on filming the movie alone, leaving nothing for the long and expensive post production process. Hooper’s partner refused to sell any of his 50% or to allow dilution of his interest, so it was up to Tobe to sell his if he was going to make the movie happen. Therefore, when he went out to raise the next $60,000 it was going to take to finish what he had started, he had to sell most of the rest of his ownership. 

3. Do business with crooks.
Even after Hooper finished with post production and had the film ready for distribution, his troubles still were not over and nor were his mistakes. He could not get any studio interested in distributing the movie.  So again in desperation, he signed a distribution agreement with a new and largely unknown player in the industry that was rumored to have mob connections.

You might be able to guess that the distribution company’s accounting of the movie’s finances showed that it made almost no money even though it had been an international success of unprecedented proportions. We have found over the years, and I am sure you will agree, that legal agreements only help you when you are dealing with honest and honorable people in the first place. No amount of lawyering will protect you from outright crooks.

4. Be less than honest with your teammates about their stake in the upside of the organization.
Hooper built in shares of the movie profits into the actor and crew compensation agreements to incent them to participate for rock-bottom, up-front cash payments. The problem was that Hooper was not clear initially and did not keep them appraised over time that they owned shares of his share of the profits, not the overall movie profits as they had assumed. He also was not clear with them that his share started at 50% out of the gate and then dwindled down to virtually nothing by the time the movie was released.

This would never have been a problem if the movie had been a flop as most had expected. The challenge became when the movie become an international phenomenon, and the cast and crew started getting royalty checks for $47.50 each for their “fair share” of the profits. As you might imagine, tempers flared and lawsuits ensued.

5. Be careful how you define a massacre, and don’t let one define you!
Even with all of the above fiascos, some were still able to keep their perspective and be thankful that they had been affiliated with the movie. The success of The Texas Chainsaw Massacre movie launched many successful and enduring careers for its cast and crew even though they were effectively cheated out of almost any direct profit from their original efforts.

However, there were others affiliated with the production that let the experience define them and were embattled in bitter and costly lawsuits for years and lost friendships for life.

Please share with us your favorite organizational lessons.

We would love to hear from you!

We have certainly learned a lot from Massacres over the years as a society with such notable events as the Boston Massacre and the Massacre at Wounded Knee. But some of the most valuable lessons for organizations have come from a much more recent pop culture massacre; The Texas Chainsaw Massacre.

1. Don’t pick up hitchhikers.
In the movie, the teenagers picked up a hitchhiker. It quickly becomes apparent that this was a mistake of massive proportions, but once you have a hitchhiker on board it becomes a little like a lobster trap. It is a situation that is easy to get yourself into, but much more difficult to remediate.

In business we are sometimes way too quick to metaphorically invite someone into our van. We hire them without properly vetting their backgrounds. Now that we have brought them to our work family, we create a much stickier situation on how to gracefully extricate ourselves from the relationship.

2. If you accidently end up with a hitchhiker, engage in compassionate outplacement; there is no need to create a terrorist.
Predictably, the kids end up with a nasty parting of the ways with the hitchhiker. The hitchhiker took their picture with a Polaroid camera and asked them for $2 in return for his services. The teenagers rebuked his business proposal. Needless to say, this turned out to be pennywise and pound foolish in the long-run.

Organizationally, once we determine that we have a threat to our culture because of questionable character or chronic underperformance, we need to take decisive action. However, there is no need to get personal or to get cheap and be short-sighted.

No matter how long a person has been a part of your organization, unless they have committed a documented violation of one of your “won’t stand for” values, they deserve compassionate and professional outplacement. You took on this responsibility when you hired them, and you must be accountable for your bad hire. Please see our previous post on “What do you Value” for more on “What you won’t stand for” values.

3. When you first notice you are running low on fuel, be willing to engage in appropriate rest and recovery.
The kids pull into a 1970s rural Texas equivalent to a modern gas station/convenience store/restaurant.  The trouble is that that are presently out of fuel. The kids indicate that they are in a hurry to visit the Franklin family homestead. Two of the kids are members of the Franklin family, and the others have joined them in their quest to revisit their family roots at the now abandoned farm of their Grandparents.

The proprietor of the C-Store, known in the movie as the “Cook,” tries to convince them they shouldn’t go up to that old abandoned farmhouse. He says the old house will be too dangerous and that they should simply stay and have something to eat and drink and wait on the fuel truck that he expects to come in the next few hours. Of course, the kids being kids ignore the man’s advice and press on up to the old Franklin place even though they are beginning to run low on fuel.

Organizationally, we commit this same error all too frequently. In our previous post on Jim Collins’ current research called “From Great to Gone,” we discuss Jim’s findings that more organizational decline is caused by over-reaching as opposed to lack of opportunity or unwillingness to engage in organizational change.

We engage in over-reaching when we ignore the signs we are running low on fuel organizationally because we are outgrowing our internal management bandwidth or financial capital structure. We stubbornly press on with our currently unsustainable growth trajectory rather than resting up, replenishing our talent pool, regaining our strength, our stamina and our financial resources before we push onto the next plateau.

4. If you ignore the advice stated in lesson number 3 above and push on ahead with your low fuel light on, be careful who you ask for help when you are finally willing to admit you are running dangerously low on fuel.
Once the kids arrive at the abandoned Franklin Farm they split up and begin to explore the house and grounds. One of the young couples that are part of the contingent of teenagers in the van sees a farmhouse next door to the Franklin place. The couple decides it is a good idea to go to this stranger’s house and ask if they can purchase some fuel for their van.

This organizational mistake results when you fail to take the advice from our earlier “Ministries of Truth” post on the importance of independent Advisory Boards for your organization and Jim Collins’ advice from our “Better than Letterman Top Ten” post about the importance of building what he calls a Council. If your organization has an Advisory Board or Council in place, you simply won’t have to go to strangers and take your chances in your time of need.

5. If you continue choosing poorly and the wheels start coming off the bus (or van in the case of the movie), go for help from a place you can trust.
As you might imagine, kids start turning up missing at an alarming rate. When they are down to the last two teens they make their final mistake. One teen advises that they use their remaining fuel to get back into town to the nearest police station and ask for help in finding the other missing teens in their party.  Unfortunately, the other teen wins the argument and they march on alone to the neighbors (Leatherface’s house), and the rest is cinematic history.

Einstein has been quoted as saying “The significant problems we face cannot be solved at the same level of thinking we were at when we created them.” No matter how good your internal people are and no matter how gifted of an Advisory Board or Council you may have, sometimes you just need to go for help. It is our sincere hope that when you reach this point you will look to the Business Consulting Team at Somerset CPAs as a resource you can trust.

Please share with us your favorite organizational lessons.

We would love to hear from you!

This is the first offering in what will be an ongoing series of blog posts we will refer to as the Organizational Deadly Sins.  There are 18 in all and we will start today with the Culture Sin.

There is one basic fundamental trait of an organization’s culture that will determine its ability to realize its full potential; discipline.

I am a big believer in Jim Collins’ formula for success; Disciplined People + Disciplined Thought + Disciplined Action = Success.  Jim makes the observation that all companies have a culture, either on purpose or by default.  In addition, he observes that some companies have some discipline, but that only the great ones have a culture of discipline.

There are three kinds of organizations:

1. Ones that have no chance for success
2. Ones that have a chance for success
3. Ones that leave nothing to chance

Organizations with a culture of discipline are the ones that leave nothing to chance.

So, the Culture Sin is allowing something other than a culture of discipline in your organization.  If a culture of discipline is a pre-requisite to greatness as Collins contends, then you should be creating this type of culture by design as opposed to leaving your culture to chance by default.

A culture of discipline starts with you!  If your mind is disciplined, you will be better able to spread discipline throughout your organization.  If your own mind is not disciplined, you won’t have a chance.  For advice on how to discipline your mind, please see our guest post from November 4, 2008; http://www.somersetcpas.com/wordpress/?p=62.

However, your personal discipline is only the beginning; you need to populate your entire organization with disciplined people.  You need hiring and pre-employment testing procedures to insure you are adding the right team members.  You need a real-time and ongoing performance evaluation cycle and you need clear lines of empowerment, authority and accountability.

You need a policy of “four strikes and you are out” as an internal justice system to ensure that you quickly weed out undisciplined hires.  No one gets hiring right every time.  As Collins concludes in Good to Great, the right balance is to be rigorous but short of ruthless.  You need to play fair with your teammates and provide second and third chances.  If you need to part ways with teammates then always engage in compassionate outplacement including a reasonable severance packages.

Jim Collins provides an excellent metaphor in Good to Great of the poster child for a disciplined person.  He calls it “Rinsing Your Cottage Cheese”. It is a story about Jim’s wife observing Dave Scott’s training practices as they were both preparing for the Ironman Triathlon.  She noticed that Dave would rinse his non-fat cottage cheese in water over the sink before he ate his lunch everyday.

She asked him why he rinsed his cottage cheese and he replied that it was to make sure that he rinsed the last bit of fat off of the cottage cheese.  He believed that a low-fat diet and lean muscle mass would be a difference maker over the long haul of the Triathlon.  Now, take into consideration that this was a man on a training regiment that burned thousands of calories a day and he still thought it was important and took the time to rinse the last bit of fat off of this low-fat cottage cheese that he ate for lunch every day.

I have concluded that it was not the actual rinsing of the cottage cheese that turned Dave Scott into an Ironman champion.  I highly doubt that physical act made any real tangible difference in his lean muscle mass.  It is more of a testament to his personal discipline and his commitment to his commitment.  Anyone could rinse their cottage cheese, but only Dave Scott was committed enough to his goal to go through this exercise on a daily basis.

This also relates to part of Tony Dungy’s Championship formula; Do the ordinary better than anyone else.  Reaching the pinnacle of success really does not require anyone involved to individually do anything superhuman.  It does require that everyone involved predictably, consistently and reliably does the ordinary things that anyone could do better than anyone else actually does them.

Bobby Knight is quoted as saying that everyone wants to win, but only a few are willing to prepare to win.  Winners make winning look easy.  This is because they have been willing to engage in hours of perfect practice to hone their skills to where their performances seem to be effortless.

Jim Loehr & Tony Schwartz describe this in their book, The Power of Full Engagement, as your ability to “perform in the storm”.  This is the essential question of will you both recognize, and be willing and able to act appropriately in your “defining moments”.

How will you perform in the storm?  Are you willing to prepare to win?  What ordinary things are you prepared to commit to doing better than anyone else?  Are you willing to “Rinse Your Cottage Cheese” and if so, what would that mean for you since you are probably not training to be an Ironman champion.

Until you have good answers to these questions, you are severely limiting your ability to reach your full potential individually and organizationally.  It takes a disciplined and focused mind and real commitment to consistently create sustainable happiness for all of your stakeholders.