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April 23, 2000

Bill Werst, Editor

This copy of Common Sense Managing TIPS is loaded with information. As always, no theories, just simple actions that produce results.

After you read the Tip of the Week and the following Best Practices article you may be motivated to audit you organization. The information is applicable to you if you manage a department, division, or the entire company. You may wish to forward a copy of this newsletter to your CEO.

Enjoy,

Bill Werst, Editor

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Table of contents:

CUSTOMER DRIVEN VISIONS: The Golden Rule of Management -- Tip of the Week

Best Practices: A Performance Based Management Case Study

You Can Teach A New Dog Old Tricks

Order Your Book NOW!

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CUSTOMER DRIVEN VISIONS: The Golden Rule of Management???228 words

By the ‘90’s the most successful companies were including their customers in the quality formula. They evolved from doing things right [quality] to doing the right things right [customer defined quality]. Using their customers’ definition of quality, they implemented plans and strategies to ensure that their customers would select them over any competition.

These companies range from amusement parks [Disney Theme Parks], to computers [Motorola], to hotels [Marriott Hotels], to banking [MBNA], to retail [Nordstrom]. Their success stories are told, retold, and analyzed in trade and professional literature. These winners’ stories contain many variables. However, they all have one common factor in their DNA. They are all customer driven. They are all survivors who follow The Golden Rule of Management: He who has the gold makes the rules.

These winners all follow this rule with a passion. They recognize that their customers have the gold and therefore, make the rules. Survival in the increasingly competitive world requires businesses to perform, not just produce. These winners focus their performance on what their customers want.

 

What does your organization do to ensure that it is "doing the right things right"?

What ongoing actions do you take to obtain your customers’ definition of success?

Do you treat you employees as customers? [Dissatisfied employees – satisfied customers]

What do you do to demonstrate this?

 

This tip of the week is from the Vision section of Common Sense Managing: Simple Ideas That Produce Results. The book is immediately available at http://www.growthassociates.org or at amazon.com.

 

Best Practices: A Performance Based Management Case Study

Sierra-At-Tahoe has the most comprehensive and congruent customer driven operational plan of any organization I’ve seen. Here’s what it is and how it works!

VISION & MISSION:

Their Vision is clear: To become Lake Tahoe’s #1 day/destination mountain snowsports resort

Their supporting Mission [Great Service, Great Value, BIG FUN!] is well established within every department. Their Mission is also alive throughout the resort -- people know it, practice it, and measure it.

 

CORE VALUES & COMMITMENTS:

Their Vision and Mission are supported by four core values. These core values are:

We are committed to our guests’ experience

We are committed to our employees

We are committed to operating our resorts responsibly

We are committed to profitability

Each value is supported by the following commitments.

Their guests’ experience commitments are:

Their employees are supported by these commitments:

Operating their resort responsibly commitments are:

Profitability commitments are:

Each department develops their individual operational plan based on the above commitments and values.

How do they know if they have successfully achieved? They measure! They hold one another accountable. They recognize and provide incentives for success. Here’s how.

 

PERFORMANCE BASED MANAGEMENT SYSTEM:

The accountability and measurement piece of the puzzle is the Scorecard. A takeoff on the Balanced Scorecard, Sierra measures its success in the four areas. The company wide commitments serve as the template for goal setting throughout the company. They have a global scorecard for the company, which gives the "score" in the four areas and forces alignment.

GUESTS are measured by external surveys, letters, emails, their recovery program (Make the Guest Right), and secret shoppers

EMPLOYEES are measured by climate surveys, percent of meeting attendance, and training feedback

RESPONSIBLE OPERATIONS is measured by No Lost Work Time days, and community involvement

FINANCIAL PERFORMANCE is measured by margins, yields, and operating profit growth

At each level the scorecard is used to track progress and pay incentives.

SUPERVISOR LEVEL: Incentives are paid based on meeting or exceeding goals to a pool that supervisors share at the end of the operating season. The pool is equally divided which fosters teamwork toward reaching goals and peer pressure.

DEPARTMENTAL (Front Line) LEVEL: Supervisors also have specific departmental goals that can drive incentives for their department based on labor hours. These incentives are to be used to motivate their front line staff to reaching the goals on a monthly basis. Their departmental scorecard measures the goals.

MANAGER LEVEL: Each of the eight top managers is responsible for work teams. Supervisors are grouped in work teams (i.e. Food & Beverage, Maintenance, Operations, Ski School, Accounting, etc.) of four to five departments each. Bi-weekly Management Team Meetings (MTM) allow each supervisor to report successes and growth areas on their specific goals in the four areas, as well as discuss action plans for the upcoming week.

This interaction allows for managers who lead the meetings to give input and discuss prior weeks results in the four areas. Records kept of each MTM meeting include:

  1. the specific goal,
  2. the weekly progress on that goal,
  3. a list of last meeting's action plans, and a yes/no on whether action plan was enacted, and
  4. action plan for upcoming period.

Supervisors are required to post results (graphs), communicate them to their staff weekly, and solicit ideas from the front line as to how to reach the goals. This completes the loop, as supervisors then can bring the information back up-line via the MTM process to the managers, and ultimately the GM.

ACCOUNTABILITY: When review time comes, it is a simple look at whether or not goals were met and why. Performers stand out. So do non-performers. The program serves not only as an incentive plan but an alignment piece, and an accountability plan.

 

CAMELOT?

Does Camelot actually exist in the Sierras? Are they perfect? "No" says Sierra’s General Manager, John Rice. John wrestles constantly to hire and motivate minimum wage seasonal employees, convince managers who question if "all this" is really necessary, and respond to corporate pressure to maintain profitability. In other words, the same issues every organization faces. The difference is that John never gives up on seeking innovation and continuous improvement.

Sierra had used a variety of consultants and books to build their current [and evolving] organizational system. I’m proud to say that he has provided each of his forty-six managers with a copy of Common Sense Managing and built several management development workshops around its content. John Rice says Sierra uses "a combination of Disney, Covey, Pritchett, Blanchard, Mulvaney, Werst, and a Heinz 57 mixture of our senior managers' experiences."

 

RESULTS:

Does it work? Absolutely! This snowsport season Sierra-At-Tahoe lost over thirty percent of its projected revenue due to a dry Christmas and still has earned a very solid profit. In 1997 mud slides closed the primary road to Sierra-At-Tahoe for 7 1/2 weeks of their twenty week snowsport season. Despite this Sierra-At-Tahoe used innovative marketing and employees to create a successful season. In fact, Sierra-At-Tahoe has earned record profits every year since then.

John Rice adds: "we’ve more than doubled the value of our resort. In 93 Sierra was sold. Three years later it sold again Without any major capital improvements Sierra was purchased at over twice the original purchase price. We see our management systems as a huge asset, and look at our training costs as having a direct return on investment."

What can we learn for Sierra’s practices?

This organizational "stuff" works!

It all starts with a clear and communicated Vision/Mission.

It is supported with congruent plans that align departments’ efforts to accomplishing the Vision.

It is glued together with measurements and accountability.

It is reinforced with recognition and incentives that reinforce desired results.

You can make record profits by satisfying people [customers and staff] while operating ethically and responsibly. What a novel idea in today’s "Built-To-Flip-IPO" world.

 

APPLICATION:

Consider using the above as a template to lay over your organization.

NOTE: Do not attempt to use it as a "cookie cutter" approach. Even the other six ski resorts in the Booth Creek corporation do not use this exact management approach. Every organization does and must reflect its leadership.

Does your organization have a clear Vision [and/or Mission]?

One that is understood and accepted by all employees? One that is alive throughout your organization?

If you are a middle manager, have you adapted a Vision/Mission statement for your division or department?

Is your Vision/Mission supported by a congruent plan [Core values, commitments, goals, objectives, action plans, or whatever you choose to call your planning elements]?

Does your plan have the effect of aligning the people within your organization toward a common and profitable goal?

Does your measurement system provide accurate and timely information on all the critical items [action items, commitments, values, objectives]?

Are you getting the information from all of the critical players in your plan [customers, employees, managers, owners]?

What recognition and incentives do you provide for successful results?

What actions do you take to maintain accountability for individual and team performance?

 

Need help with any of the above questions? Do you have an additional question? Either call me at [541] 386 -1117 or send me an email at bill@growthassociates. If you would like John Rice to provide additional information please post your question on the Common Sense Managing discussion site at commonsensemanaging@eGroups.com. John is one of the monitors of this discussion group and I will insure that he gets your question.

 

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You Can Teach A New Dog Old Tricks

I got to try snowboarding for the first time while researching the above article. A very humbling experience for an ex-National Handicapped Ski Team Instructor, PSIA certified ski instructor, and seasoned skier. Here’s my slightly biased account.

I took my first snow boarding lesson at Sierra on Friday. Great falls, great fun. It was VERY humbling to start all over again as a rank beginner. A chronological recap of my experience follows.

Go ten feet, fall, turn, fall, turn, fall, fall, turn, fall, stand up, fall, stand up, fall, turn, fall, stand up, fall, adjust my pants, fall, fall, turn, fall, turn, turn, fall, turn, turn, turn, fall [I'm getting better?], stand up, fall [I only thought I was getting better?]. Take a break. Get back on board. Begin with second fall [see above] and repeat.

Meanwhile, instructor Greg Hart continued to encourage me and tell me how well I was doing compared to most other first time students. [I’d given him the small half of a $100 bill at the beginning of the lesson — starving instructors have been known to say anything for the other half of the tip.]

Later I discovered his most recent other first time students included a 73 year old arthritic grandmother with osteoporosis, Timba the one legged Elephant Boy, and a California Congressman who couldn’t balance a budget much less a board. Greg offered my the small half back if I promised not to tell anyone that he was my instructor.

I also learned new snow boarding words like "Ooooh noooo" [reserved for undesired speed increases], "Shiiiit" [term used while falling backward after just having gotten up from falling forward], "Half Pipe" [a term that describes the large groove to my right that I almost went into when the red boundary rope failed to stop my graceful momentum], and "Al l l l l l Right!" [self congratulatory term used after completing one turn without falling or crashing into another skier or solid object].

The Bermuda Ski Team will of course be encouraged to venture into this new opportunity as soon as I can get down the hill one time. The Team may want to recruit a new instructor for snow boarding. I will not be oooooooffended. SHIIIIIIIIIIT, I just fell again.

 

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Have a great week - you've already started it with a little extra common sense.

Bill Werst

 

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