Tuesday, July 5, 2011
Philanthropy
"Giving back" is one of those things one probably never considers when evaluating a company to go to work for, but makes one of the best qualities of an employer. Before I pledged a sorority I don’t think I had ever heard the word philanthropy. Little did I know my entire four years as a member that I would be participating in dozens of service events, charities, and so on. If everyone were being honest, giving back to the community wouldn't rank at the top of the wish list of ways to spend your time as a college student. Nevertheless, raising money for good causes and serving the community has a way of growing on people. For me, the enjoyment of giving back became a habit of service that has carried on into my career. That is one reason why I am proud to be where I am today. DMI Entegral Solutions has made a commitment to serving and giving back in areas that are important to its employees.
One such charity is the Fort Worth Teen Challenge. For the past several years, DMI has been involved in raising funds for the Fort Worth Teen Challenge and over that period the DMI Golf Tournament has raised over $500,000 to help fund this phenomenal organization. Teen Challenge is a Christian drug and alcohol rehabilitation ministry for women ages eighteen and older. Those deciding that they are serious about change in their lives make a personal commitment to come and live in the residential program for a period of twelve to eighteen months, in which time the girls live in a structured, safe environment conducive to huge personal growth. They get jobs to pay their own way, they maintain the grounds, cook for each other, participate in team building activities, and so on. Most importantly, they are taught the Bible and how to strengthen their own will so that they will remain sober after they leave. The statistics show that 86% of the women that leave FW Teen Challenge remain drug free. For more information, click here.
The final note on philanthropy is that old Biblical principle that "it is better to give than receive." I have never met anyone that said they didn't personally get more out of giving than the group they gave to. Remember that the next time you get the opportunity to volunteer or help a cause that is important to you or your organization.
Kristin Comer
Marketing Manager
DMI Entegral Solutions
Monday, May 16, 2011
Simple Message
I was reminded last week by a dear friend (the kind of friend that will be honest with you when no one else will) about a lesson that I learned a few years back. A painful lesson. A humbling lesson. The kind of lesson that cuts to the core of a "good" business man or a "top" salesman, or any other person that interfaces with clients, because it tears down the very attribute that makes you who you are. This lesson, of course, is KEEP IT SIMPLE STUPID!
Yes, I am a complicated thinker. Everybody that knows me knows that. But at times, I have learned to hold back the web of intertwining thoughts and distill my message down to what truly matters. Other times, like recently, I have tended to live in that web and communicate as though I was the one on the other end of the communication - as though I, personally, was the audience, communicating to myself in the complicated way that I think. Anyone care to guess rule number one in business communication? That's right... communicate in the language of your audience - the real audience - in the way they listen and learn.
An old Greek quote goes something like, "Never say a little in many words, but a great deal in a few." That is the challenge, but one we shouldn't forget or abandon. The simpler the message, the more powerful. In fact, one of the central truths of the book Good to Great, by Jim Collins, is that the leaders that can make a simple message out of the complicated array of information around them become the best leaders. The companies that they lead become the best companies.
I am up for the challenge. Are you?
Yes, I am a complicated thinker. Everybody that knows me knows that. But at times, I have learned to hold back the web of intertwining thoughts and distill my message down to what truly matters. Other times, like recently, I have tended to live in that web and communicate as though I was the one on the other end of the communication - as though I, personally, was the audience, communicating to myself in the complicated way that I think. Anyone care to guess rule number one in business communication? That's right... communicate in the language of your audience - the real audience - in the way they listen and learn.
An old Greek quote goes something like, "Never say a little in many words, but a great deal in a few." That is the challenge, but one we shouldn't forget or abandon. The simpler the message, the more powerful. In fact, one of the central truths of the book Good to Great, by Jim Collins, is that the leaders that can make a simple message out of the complicated array of information around them become the best leaders. The companies that they lead become the best companies.
I am up for the challenge. Are you?
Wednesday, March 16, 2011
Looking Glass Land - Part 2
The following is Part 2 of a three part article by Perry Been, Public Sector Services Director.
In Lewis Carroll’s (Charles Lutwidge Dodgson) sequel to Alice’s Adventures in Wonderland (1865), Through the looking Glass, and What Alice Found There (1871), we find young Alice pondering what the world is like on the other side of a mirror's reflection. Climbing up on the fireplace mantel, she pokes at the wall-hung mirror behind the fireplace and discovers, to her surprise, that she is able to step through it to an alternative world, the Looking-Glass Land.
After spending 18 ½ years in the public service arena, with the last 9 ½ of those years serving as the Deputy Director of the State Energy Conservation Office (SECO), I now find myself in Looking-Glass Land working in the private sector for DMI Entegral Solutions. I enjoy telling folks that I am doing the same thing I did for the State: I’m dealing with the same end-users, but now I can tell them what I really think. While said tongue-in-cheek, there is a lot of truth in that statement and I would like to share just a few things that I have learned and observed during the past 18 months of my life in Looking-Glass land.
Click here for Looking Glass Land - Part 1
Lesson 2 – The best decisions are based on adequate information.
While on the surface this is merely stating the obvious, I am constantly surprised by the decisions I see being made without all of the facts. I suppose I shouldn't be surprised anymore, but nonetheless I am. It happens every time a home buyer selects a title company based on the recommendation of their Realtor, or a consumer walks into Best Buy and purchases a TV without looking up the ratings online.
And, sadly enough, it has been happening with various forms of construction and renovation contracting since the dawn of time. During my years at SECO, we had the opportunity to review dozens of project proposals by Energy Service Companies (ESCOs), engineers, and other types of firms to State Agencies in Texas. As a taxpayer and employee of the State, it was my duty to try to help my clients (the Agencies) gather all of the right information before making a decision. Most of the time, our efforts were successful in terms of helping our clients make solid decisions. One major exception, however, was our lack of ability to help in any significant way with Performance Contracts. Unfortunately, there wasn't anything we could do about it.
For those not familiar with the term "Performance Contract", it is a contract with one entity to provide energy savings renovations with some sort of guarantee of energy savings tied to it. Performance Contracting law in Texas requires that selection of a contractor be based solely on qualifications, just as an owner would select an architect or engineer. In fact, it is the only construction method available that must be procured as a professional service. Using this methodology, owners are prohibited from asking or talking about costs, profits, overhead, or any other pricing methodologies until after a company has been formally selected and notified. (If this sounds odd to you, imagine how odd it is to those of us tasked with making sense out of it...)
What all of this means is that by the time a project made it to SECO for review, all we could do is advise our clients what to do in the (invariably tough) situation they were in. Many times, we were seeing prices at roughly the same time our clients were - 9 to 12 months after their contractor was selected. By that point, our clients negotiating position was very weak.
Our approach with those situations was to push the contractors to "open their books" and give detailed information on the prices in lieu of the "lump sum" price that often was provided. At that point in the process, all we could hope for was that a litany of questions (and the anticipation of them) would force the contractors to be honest and reasonable. This was not a perfect solution, but it was necessary.
If I had known then what I know now, I could have been much more effective at helping my clients with their information gathering and decision making. The first way I would help is in the interpretation and navigation of the Performance Contracting law. Even though a contractor is selected based on qualifications, negotiations on pricing for engineering, overhead and profit, and project management can and should be conducted prior to any work being done. Though this is possible, most owners do not realize it and do not know the correct variables to negotiate. I would have kept an eye on the RFQs published by my clients, and advised them not to sign anything (including a detailed audit contract) until they had negotiated all of the construction markups and fees.
The second way I would have helped is by encouraging the use of the Design Build statute as their procurement model, as it is much more apropos for energy conservation type of work. Like Performance Contracting, an RFQ is issued requesting contractors to submit their qualifications. Unlike Performance Contracting, however, the end-user may then short-list up to five (5) companies and ask additional questions about pricing, schedule, bandwidth, and anything else relevant to the specific project.
There are other differences, such as the lack of a guarantee mandate in the Design Build law, and no limits on the type of scope (energy savings only) that are in the PC law. But fundamentally, the Design Build statute is more flexible and gives the owner more of the right kind of information to make a decision based on the economic value that each contractor is offering.
One final thought: Since joining DMI Entegral, we have given all of our clients their options on procurement in a straightforward manner, describing the pros and cons of PC and DB methods in an unbiased manner. Without exception, our clients have selected the Design Build method because it provides them the ability to make the most informed selection. What does that tell you?
In Lewis Carroll’s (Charles Lutwidge Dodgson) sequel to Alice’s Adventures in Wonderland (1865), Through the looking Glass, and What Alice Found There (1871), we find young Alice pondering what the world is like on the other side of a mirror's reflection. Climbing up on the fireplace mantel, she pokes at the wall-hung mirror behind the fireplace and discovers, to her surprise, that she is able to step through it to an alternative world, the Looking-Glass Land.
After spending 18 ½ years in the public service arena, with the last 9 ½ of those years serving as the Deputy Director of the State Energy Conservation Office (SECO), I now find myself in Looking-Glass Land working in the private sector for DMI Entegral Solutions. I enjoy telling folks that I am doing the same thing I did for the State: I’m dealing with the same end-users, but now I can tell them what I really think. While said tongue-in-cheek, there is a lot of truth in that statement and I would like to share just a few things that I have learned and observed during the past 18 months of my life in Looking-Glass land.
Click here for Looking Glass Land - Part 1
Lesson 2 – The best decisions are based on adequate information.
While on the surface this is merely stating the obvious, I am constantly surprised by the decisions I see being made without all of the facts. I suppose I shouldn't be surprised anymore, but nonetheless I am. It happens every time a home buyer selects a title company based on the recommendation of their Realtor, or a consumer walks into Best Buy and purchases a TV without looking up the ratings online.
And, sadly enough, it has been happening with various forms of construction and renovation contracting since the dawn of time. During my years at SECO, we had the opportunity to review dozens of project proposals by Energy Service Companies (ESCOs), engineers, and other types of firms to State Agencies in Texas. As a taxpayer and employee of the State, it was my duty to try to help my clients (the Agencies) gather all of the right information before making a decision. Most of the time, our efforts were successful in terms of helping our clients make solid decisions. One major exception, however, was our lack of ability to help in any significant way with Performance Contracts. Unfortunately, there wasn't anything we could do about it.
For those not familiar with the term "Performance Contract", it is a contract with one entity to provide energy savings renovations with some sort of guarantee of energy savings tied to it. Performance Contracting law in Texas requires that selection of a contractor be based solely on qualifications, just as an owner would select an architect or engineer. In fact, it is the only construction method available that must be procured as a professional service. Using this methodology, owners are prohibited from asking or talking about costs, profits, overhead, or any other pricing methodologies until after a company has been formally selected and notified. (If this sounds odd to you, imagine how odd it is to those of us tasked with making sense out of it...)
What all of this means is that by the time a project made it to SECO for review, all we could do is advise our clients what to do in the (invariably tough) situation they were in. Many times, we were seeing prices at roughly the same time our clients were - 9 to 12 months after their contractor was selected. By that point, our clients negotiating position was very weak.
Our approach with those situations was to push the contractors to "open their books" and give detailed information on the prices in lieu of the "lump sum" price that often was provided. At that point in the process, all we could hope for was that a litany of questions (and the anticipation of them) would force the contractors to be honest and reasonable. This was not a perfect solution, but it was necessary.
If I had known then what I know now, I could have been much more effective at helping my clients with their information gathering and decision making. The first way I would help is in the interpretation and navigation of the Performance Contracting law. Even though a contractor is selected based on qualifications, negotiations on pricing for engineering, overhead and profit, and project management can and should be conducted prior to any work being done. Though this is possible, most owners do not realize it and do not know the correct variables to negotiate. I would have kept an eye on the RFQs published by my clients, and advised them not to sign anything (including a detailed audit contract) until they had negotiated all of the construction markups and fees.
The second way I would have helped is by encouraging the use of the Design Build statute as their procurement model, as it is much more apropos for energy conservation type of work. Like Performance Contracting, an RFQ is issued requesting contractors to submit their qualifications. Unlike Performance Contracting, however, the end-user may then short-list up to five (5) companies and ask additional questions about pricing, schedule, bandwidth, and anything else relevant to the specific project.
There are other differences, such as the lack of a guarantee mandate in the Design Build law, and no limits on the type of scope (energy savings only) that are in the PC law. But fundamentally, the Design Build statute is more flexible and gives the owner more of the right kind of information to make a decision based on the economic value that each contractor is offering.
One final thought: Since joining DMI Entegral, we have given all of our clients their options on procurement in a straightforward manner, describing the pros and cons of PC and DB methods in an unbiased manner. Without exception, our clients have selected the Design Build method because it provides them the ability to make the most informed selection. What does that tell you?
Friday, January 14, 2011
"They Love Cash. We Love Customers!"
There are a lot of TV and radio ads out there that we all laugh at and remember. Like the Superbowl FedEx commercial where the pterodactyl attempting to deliver the stick gets eaten by the T-Rex... should have used FedEx. Or the Geico "woodchucks chucking wood", or Maxwell the little piggy going "Wee Wee Wee" all the way home in the back of Mrs. A's car.
Laughing at an ad, however, is different from an ad being truly effective. Southwest Airlines has some of the best ads going, in my opinion, not just because they are funny, but because at the end of the ad you know something about their company. You feel like you have learned something about them that may be beneficial to you at some point.
One recent ad on the radio caught my attention for a couple of reasons. The ad is condemning the practice by other airlines of charging "change fees" of $100-$150 in addition to fare difference. At the end of the ad, an incredulous lady asks, "How do they get away with that?", and the man answers in a somewhat triumphant voice, "They love cash. We love customers!".
Southwest doesn't charge a change fee, and those that frequently fly Southwest know this already (and it is a key reason for their loyalty). For anybody that is a student of successful businesses, this ad tells us two key things. First, there is a reason they don't have to charge fees for things that other airlines are charging fees for. No fees for extra bags, and no fees for changing a ticket -- the question you should be asking is how and why? While other airlines are struggling to make a profit, Southwest has weathered the bad economy because they have an extremely efficient business. They don't charge extra because it doesn't cost them extra. To put it simply, they run a better business.
Even so, just because they don't have to charge extra they still could. That would be gravy, right? That leads to the second key point: they have made a strategic decision based on the belief that they will benefit more by not following the crowd. Let's be real; they aren't purely benevolent. If they believed they were giving away cash, they wouldn't be doing it. What they are doing is bringing in more cash by gobbling up market share. Their belief is that customers will flock to them because their efficient business allows them to provide better value. More customers means more profit dollars, even though they make less gravy off of each customer. All signs point to their strategy as working.
So what? The point is that every company has to make a choice between two seemingly opposite ends of the spectrum. On one end is cash; on the other end is more customers. Charge more because you have a valid reason and because your costs are higher, knowing that you will lose some customers... or because you anticipate many more customers, keep the charges low. Those that run an efficient business realize that cash and customers aren't opposite after all.
Laughing at an ad, however, is different from an ad being truly effective. Southwest Airlines has some of the best ads going, in my opinion, not just because they are funny, but because at the end of the ad you know something about their company. You feel like you have learned something about them that may be beneficial to you at some point.
One recent ad on the radio caught my attention for a couple of reasons. The ad is condemning the practice by other airlines of charging "change fees" of $100-$150 in addition to fare difference. At the end of the ad, an incredulous lady asks, "How do they get away with that?", and the man answers in a somewhat triumphant voice, "They love cash. We love customers!".
Southwest doesn't charge a change fee, and those that frequently fly Southwest know this already (and it is a key reason for their loyalty). For anybody that is a student of successful businesses, this ad tells us two key things. First, there is a reason they don't have to charge fees for things that other airlines are charging fees for. No fees for extra bags, and no fees for changing a ticket -- the question you should be asking is how and why? While other airlines are struggling to make a profit, Southwest has weathered the bad economy because they have an extremely efficient business. They don't charge extra because it doesn't cost them extra. To put it simply, they run a better business.
Even so, just because they don't have to charge extra they still could. That would be gravy, right? That leads to the second key point: they have made a strategic decision based on the belief that they will benefit more by not following the crowd. Let's be real; they aren't purely benevolent. If they believed they were giving away cash, they wouldn't be doing it. What they are doing is bringing in more cash by gobbling up market share. Their belief is that customers will flock to them because their efficient business allows them to provide better value. More customers means more profit dollars, even though they make less gravy off of each customer. All signs point to their strategy as working.
So what? The point is that every company has to make a choice between two seemingly opposite ends of the spectrum. On one end is cash; on the other end is more customers. Charge more because you have a valid reason and because your costs are higher, knowing that you will lose some customers... or because you anticipate many more customers, keep the charges low. Those that run an efficient business realize that cash and customers aren't opposite after all.
Thursday, December 9, 2010
The Weakest Link
To some businesses, client loyalty is everything. After making significant investments in sales, marketing and other client acquisition endeavors, keeping the client is supposed to pay the investment back with profit. It is a simple model that has worked for years in every type of industry, from insurance to iPods. But as can be seen by the following story, client loyalty can be a fragile thing. The story is one that demonstrates that no matter how good pieces of your organization may be, sometimes the one weak link can be the difference in keeping your clients and sinking your ship.
The story starts on a ranch in South Texas, with a friend of mine (we will call him John), and a large Ford diesel truck. For those who drive the big F350's, you will know that there is a simple little gasket that tends to wear out every 3 or 4 years. For John - on a hunting weekend with his buddies - this little $20 fuel gasket wore out at precisely the wrong time. With no shop for miles and a truck leaking diesel, he luckily found an off duty mechanic that knew just what to do, and had the time and energy to help him. For about $150, John was treated like royalty, and his weekend was salvaged.
Fast forward a few years to this past May. Same guy, different problem. This time, John walks to his truck in the parking lot at Love Field, only to find that his water pump had busted and he was stranded. This time, he made a call to a company referred to him by another friend, and things went great. A well spoken, helpful guy took his call, sent a tow truck, and took care of everything at a reasonable price (considering the bind he was in.) This company earned a client that day.
Now for the final piece of the story. A few weeks ago John walked out to his truck in his driveway, when, much to his displeasure, he encountered the old "gasket leaking diesel" problem again. This time, he knew just where to go, and just about how much it would cost him. He dropped the truck off and waited to get the call with the diagnosis. When the technician called him, John got a surprise. The gasket was indeed the problem, but the price would be almost $400. $70 for the gasket, and $330 for the labor.
The price wasn't necessarily the problem; it was what happened after the initial news. John asked a simple question: "What would Dave say about that quote?" Dave, of course, was the owner of the garage and the friendly guy that took the call that day in May. The technician then had two options. First, he could have defended his price and logically explained why $400 was the right price. Or, he could have suggested that he put a call in to Dave to ask for permission to give a discount. Instead, he chose the third option. The one that lost them a client. He told my friend that, "maybe he could get that part a little cheaper, so he would call around and call him back." A couple of hours later, John got a call with a new quote of $275.
No doubt, it was a better deal, but the damage was done. John felt like he couldn't trust the company any more. He had one bad experience with one weak link in an organization, but sometimes that is all it takes.
The lesson here is simple. When anyone in our organization interacts with a Client or a potential Client, we have to know that they are honest, credible, and experienced. We cannot afford one, single instance where someone representing our organization is anything less than all of those things. How does that translate in your organization? How hard is that to manage? Hard or not, don't let a weak link kill your Client loyalty.
The story starts on a ranch in South Texas, with a friend of mine (we will call him John), and a large Ford diesel truck. For those who drive the big F350's, you will know that there is a simple little gasket that tends to wear out every 3 or 4 years. For John - on a hunting weekend with his buddies - this little $20 fuel gasket wore out at precisely the wrong time. With no shop for miles and a truck leaking diesel, he luckily found an off duty mechanic that knew just what to do, and had the time and energy to help him. For about $150, John was treated like royalty, and his weekend was salvaged.
Fast forward a few years to this past May. Same guy, different problem. This time, John walks to his truck in the parking lot at Love Field, only to find that his water pump had busted and he was stranded. This time, he made a call to a company referred to him by another friend, and things went great. A well spoken, helpful guy took his call, sent a tow truck, and took care of everything at a reasonable price (considering the bind he was in.) This company earned a client that day.
Now for the final piece of the story. A few weeks ago John walked out to his truck in his driveway, when, much to his displeasure, he encountered the old "gasket leaking diesel" problem again. This time, he knew just where to go, and just about how much it would cost him. He dropped the truck off and waited to get the call with the diagnosis. When the technician called him, John got a surprise. The gasket was indeed the problem, but the price would be almost $400. $70 for the gasket, and $330 for the labor.
The price wasn't necessarily the problem; it was what happened after the initial news. John asked a simple question: "What would Dave say about that quote?" Dave, of course, was the owner of the garage and the friendly guy that took the call that day in May. The technician then had two options. First, he could have defended his price and logically explained why $400 was the right price. Or, he could have suggested that he put a call in to Dave to ask for permission to give a discount. Instead, he chose the third option. The one that lost them a client. He told my friend that, "maybe he could get that part a little cheaper, so he would call around and call him back." A couple of hours later, John got a call with a new quote of $275.
No doubt, it was a better deal, but the damage was done. John felt like he couldn't trust the company any more. He had one bad experience with one weak link in an organization, but sometimes that is all it takes.
The lesson here is simple. When anyone in our organization interacts with a Client or a potential Client, we have to know that they are honest, credible, and experienced. We cannot afford one, single instance where someone representing our organization is anything less than all of those things. How does that translate in your organization? How hard is that to manage? Hard or not, don't let a weak link kill your Client loyalty.
Tuesday, November 9, 2010
Looking Glass Land - Part 1
The following is Part 1 of a three part article by Perry Been, Public Sector Services Director.
In Lewis Carroll’s (Charles Lutwidge Dodgson) sequel to Alice’s Adventures in Wonderland (1865), Through the looking Glass, and What Alice Found There (1871), we find young Alice pondering what the world is like on the other side of a mirror's reflection. Climbing up on the fireplace mantel, she pokes at the wall-hung mirror behind the fireplace and discovers, to her surprise, that she is able to step through it to an alternative world, the Looking-Glass Land.
After spending 18 ½ years in the public service arena, with the last 9 ½ of those years serving as the Deputy Director of the State Energy Conservation Office (SECO), I now find myself in Looking-Glass Land working in the private sector for DMI Entegral Solutions. I enjoy telling folks that I am doing the same thing I did for the State: I’m dealing with the same end-users, but now I can tell them what I really think. While said tongue-in-cheek, there is a lot of truth in that statement and I would like to share just a few things that I have learned and observed during the past 14 months of my life in Looking-Glass land.
Lesson 1- Bigger doesn’t necessarily mean better.
On the State side of the looking glass I used to believe that in order for the end user to be adequately protected in their renovation projects, they needed to deal with large companies with mega-millions in cash reserves and a staff of thousands. My perception was that it takes a giant with a giant balance sheet to stand behind a "guarantee" of energy savings and to avoid bankruptcy. Even before I stepped through the looking glass, I began to see the error in that thinking.
Over time, the reality that I observed about energy projects with guarantees is the rarity of guarantees ever being enforced. I saw a few in my days in SECO, but mostly for very small percentages of the guaranteed savings. I never observed a guarantee providing a tangible, financial return on investment. That is not to say that guarantees do not have value, only that I've watched some pay more for the guarantee than the value delivered. Furthermore, saving money through energy efficiency has had a proven track record for over a decade. In my experience, the successes I have seen have not been because of a large staff or a lot of money, but a result of sound engineering practices, attention to detail, and a commitment to excellence.
Another thing I started learning while at SECO (and now understand more fully) is the cost of dealing with a large company. There are two categories: 1) financial, and 2) emotional.
1) Despite the notion that bigger companies run more efficiently, I have observed just the opposite. Large, publicly traded companies have shareholders that demand growth and dividends. Usually, one comes at the expense of the other: if you want to grow, you reinvest and have fewer dividends; if you want to hand out dividends, you sacrifice reinvestment and growth. To have both growth and dividends, the profit margins must be very, very healthy. In this industry specifically, the "value premium" that has existed and has been priced into the market norms has allowed this type of profitable growth. To be clear, I am not against either profit or growth. What I have learned, however, is that smaller, private companies do not have the same profit demands on them, and can provide a substantial cost benefit to their clients with no drop off in quality.
2) Dealing with a multi-layered mega company can take its toll on a person. While I have enjoyed my relationships with many of the individuals within those types of companies, I can't say that the organizations have provided the same warm fuzzies. The primary issue is the time and effort it takes to get a decision, a change, a concession, or a signature. Most large companies do not endow their salespeople or engineers with the authority to act in the field. They have well defined processes and procedures, with multiple levels of authority that tend to engage in lengthy debates before any definitive answers can be relayed back to a client on even the most insignificant of topics. The most frustrating aspect of this in my experience has been when the "decision maker" high enough on the food chain finally comes in with the authority to solve the problem, and we realized that we wasted months leading up to that. With smaller companies, there is typically easy access to decision makers, and the delays associated with multi-layered management are non-existent.
To conclude lesson #1, I'll borrow an old phrase from an unknown author, "It really isn’t the size of the dog in the fight, but rather the size of the fight in the dog that matters." As long as the company is big enough, I say pick the smallest company that is big enough to do your job.
In Lewis Carroll’s (Charles Lutwidge Dodgson) sequel to Alice’s Adventures in Wonderland (1865), Through the looking Glass, and What Alice Found There (1871), we find young Alice pondering what the world is like on the other side of a mirror's reflection. Climbing up on the fireplace mantel, she pokes at the wall-hung mirror behind the fireplace and discovers, to her surprise, that she is able to step through it to an alternative world, the Looking-Glass Land.
After spending 18 ½ years in the public service arena, with the last 9 ½ of those years serving as the Deputy Director of the State Energy Conservation Office (SECO), I now find myself in Looking-Glass Land working in the private sector for DMI Entegral Solutions. I enjoy telling folks that I am doing the same thing I did for the State: I’m dealing with the same end-users, but now I can tell them what I really think. While said tongue-in-cheek, there is a lot of truth in that statement and I would like to share just a few things that I have learned and observed during the past 14 months of my life in Looking-Glass land.
Lesson 1- Bigger doesn’t necessarily mean better.
On the State side of the looking glass I used to believe that in order for the end user to be adequately protected in their renovation projects, they needed to deal with large companies with mega-millions in cash reserves and a staff of thousands. My perception was that it takes a giant with a giant balance sheet to stand behind a "guarantee" of energy savings and to avoid bankruptcy. Even before I stepped through the looking glass, I began to see the error in that thinking.
Over time, the reality that I observed about energy projects with guarantees is the rarity of guarantees ever being enforced. I saw a few in my days in SECO, but mostly for very small percentages of the guaranteed savings. I never observed a guarantee providing a tangible, financial return on investment. That is not to say that guarantees do not have value, only that I've watched some pay more for the guarantee than the value delivered. Furthermore, saving money through energy efficiency has had a proven track record for over a decade. In my experience, the successes I have seen have not been because of a large staff or a lot of money, but a result of sound engineering practices, attention to detail, and a commitment to excellence.
Another thing I started learning while at SECO (and now understand more fully) is the cost of dealing with a large company. There are two categories: 1) financial, and 2) emotional.
1) Despite the notion that bigger companies run more efficiently, I have observed just the opposite. Large, publicly traded companies have shareholders that demand growth and dividends. Usually, one comes at the expense of the other: if you want to grow, you reinvest and have fewer dividends; if you want to hand out dividends, you sacrifice reinvestment and growth. To have both growth and dividends, the profit margins must be very, very healthy. In this industry specifically, the "value premium" that has existed and has been priced into the market norms has allowed this type of profitable growth. To be clear, I am not against either profit or growth. What I have learned, however, is that smaller, private companies do not have the same profit demands on them, and can provide a substantial cost benefit to their clients with no drop off in quality.
2) Dealing with a multi-layered mega company can take its toll on a person. While I have enjoyed my relationships with many of the individuals within those types of companies, I can't say that the organizations have provided the same warm fuzzies. The primary issue is the time and effort it takes to get a decision, a change, a concession, or a signature. Most large companies do not endow their salespeople or engineers with the authority to act in the field. They have well defined processes and procedures, with multiple levels of authority that tend to engage in lengthy debates before any definitive answers can be relayed back to a client on even the most insignificant of topics. The most frustrating aspect of this in my experience has been when the "decision maker" high enough on the food chain finally comes in with the authority to solve the problem, and we realized that we wasted months leading up to that. With smaller companies, there is typically easy access to decision makers, and the delays associated with multi-layered management are non-existent.
To conclude lesson #1, I'll borrow an old phrase from an unknown author, "It really isn’t the size of the dog in the fight, but rather the size of the fight in the dog that matters." As long as the company is big enough, I say pick the smallest company that is big enough to do your job.
Monday, October 4, 2010
The Speed of Trust
There is an old business axiom that goes something like this: “Quality. Speed. Cost. Pick 2.” The conventional wisdom has been that if you want something fast and good quality, you will pay a premium. If you want something cheap and fast, you will sacrifice quality. And if you want something high quality at a good price, you will have to wait. Most of the time, this is probably true.
Stephen M. R. Covey authored a book that touches on this topic, and attempts to reveal a loophole in this universally accepted logic. The book, “The Speed of Trust”, is really a reflection of the way things used to be. There was a day that business got done on a handshake, and you could take a man’s word to the bank. Somewhere along the way, that reality has succumbed to the new reality of dotting every “I” and crossing every “t” in a complicated world of red tape and multiple tiers of authority.
Of course, Mr. Covey gives us no magic formula for returning to the good old days at a macro level, but he does offer insight into creating one-off business relationships that break the current mold. The key, he writes, is creating and maintaining unusually high trust.
Covey states that, at a minimum, trust is built on two things: 1) Clear and transparent communication, and 2) Accountability for results. The first should be a commitment from the first handshake in the first meeting. The second: a demonstrated and proven philosophy of your business. Obviously, there are many more aspects of building trust embedded in the 322 pages of the book.
For all who aspire to transform your business relationships, your companies, or your industry, “The Speed of Trust” is worth the read. If nothing else, it is a reminder of what once was, and gives us a little hope that those who embrace the principles inside are on the right track.
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