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GOING UNDERC0VER andThe Value of Critical and Honest Employee Input

Without employees who are productive and happy, growing a company will be difficult. This is why I always encourage candid and open dialogue between management and employees. On the same token, it is generally more beneficial to keep a pulse on company morale and direction through an independent third party. This is because it is often difficult to get honest and direct answers from employees on what they really think.

An outside independent party will – take a careful look at your offices, stores or locations to assess how things are running from a professional outside perspective. Then, by earning the trust of key personnel, will be able to successfully troubleshoot areas weakness.
Here are a few Case Examples:

A Deli in Walnut Creek, CA.
Total employees – 73

A onetime popular destination for hungry patrons twenty-six miles east of San Francisco, the small chain of delis was quickly losing market share. “I’m not really sure what the problem is exclaimed the Senior Partner, we used to have line out the door, but now business has dropped off. Can you help us develop a marketing strategy so we can win back our customers?”

“Well sure, I replied, but before we do that, I think it behooves such an investment to focus on what people are currently experiencing first, and identify any problems or deficiencies that give customers a less then delightful experience.”

As with many other similar situations we began with an in-depth customer survey followed by me going under cover. The difference between a Mystery Shopper approach and going under cover is that I play the role of the Mystery Shopper from a specific professional perspective of knowing exactly what I was looking for. And yes, this is a big difference!

• How easy is it to find? How is the signage?
• Is parking adequate, or do I need to worry about door dings?
• What does the place look like? How does it smell? Is there music that compliments the inside ambiance and environment?

1. I walked into the first location to a low vibe environment. “No energy here, I concluded. Why would I want to patronize a place that was boring?”

2. At the next location, I noticed a unpleasant smell and then looking up toward the top right ceiling observed a thick group of cobwebs. “So what else was un kempt?”

3. The third location was equally boring, but at least had no cobwebs. Nor did it have an attentive staff. While I looked at the menu board, the employees busily stared at their phones, one texting while the other seemed fixated on Facebook. “Nothing worse than inattentive employees who don’t acknowledge the customers!”

Taking my notes with me, I set up a series of meetings with various employees in the organization until I was meeting with Hillary, the General Manager. My conversation began with my experience from going under cover.
Thirty minutes after earning the trust of Hillary, the middle aged woman suddenly stopped me by asking, “do you really want to know my opinion, and I mean – my honest opinion?“ “Of course I replied.” She then excused herself and returned with a large folder. “I have been keeping notes on everything that has either happened or has gone wrong with this company for the last six years, but the business owners have not listened, this is why things have gotten so bad around here and why we have not been making any money. Even worse, she continued, this is why it is so difficult to get my people to give a damn! Why bother? Management does not listen or seem to care anyway, so why should the employees?”

We reviewed the file and were able to use it as a toolbox for harvesting valuable information and feedback from other personnel. Much of this confirmed serious management deficiencies. As a result, the argument for recommending changes in policy and protocols was a simple one.

Benefits and Results: The client agreed to consider the changes, which originated in Hillary’s files, thus returning their chain of Delis to profitability. (Sometimes the people in the trenches have a better feel for what needs to be done to be successful then those who actually own the company) I suggested that we give the process several months and see if this will be enough to begin the process for winning back customers. The ad campaign was then designed with a theme of “finding out what has changed!”

Because fundamental issues were resolved between management and employees, major expenditures for adverting were averted. The other realization however, was that the company owners were ready to sell – and retire. Eight months later, this too was carried out after referring them to a competent business broker.

A Tree Service in Austin Texas
Total employees – 35
A small company built and managed by the owner and his GM (brother) had an issue with discernment. The problem was that they were good at what they did, but not necessarily good at reading people. After all, some of the key people that were with the company were friends and relatives. Therefore, it was not always easy for the owner and GM to accept that some staff members were skimping on their responsibilities or worse, had addiction issues that kept them from either coming to work, or performing well when they did.

After interviewing key staff and personnel in the field, it was determined, that three counterproductive office employees and two outside project managers needed to be dismissed.

Benefits and Results – led to the removal of several unproductive employees thus saving the business $15,388.00 per month. More importantly, the office morale increased with an immediate lift of positive attitude and energy. The company environment was saved along with money no longer spent on unsavory or poor performing employees. As an incentive, a portion of the money saved was redistributed into higher salaries for key productive employees as a reward for doing a great job.

A Renovation Contractor in Oakland CA.
Total employees – 86
A fast growing company, with over eighty employees was experiencing an unusually high turnover rate. Fifteen employees were interviewed and an assessment report provided several pages of valid grievances. In addition, we discovered that the employer was in violation of labor laws, thus vulnerable to fines and/or lawsuits by disgruntled personnel.

It was recommended that Company President allow us to conduct an open and candid meeting between himself and his employees and to listen to all the grievances with an open mind. We followed up several weeks later to make sure that company changes – as agreed upon were actually being implemented. We also sought additional improvements and long-terms systems designed to maintain mutual trust between him and his team.

Benefits and Results: Employer immediately implemented changes as required by State Labor Laws. He then authorized policy changes in response to employee grievances, currently affordable along with the promise to add additional employee request, within the coming months.

This engagement dramatically eliminated distrust between management and personnel resulting in a significant drop off in employee turnover (and cost associated with turnover).

In addition, reduced “shop stealing” of tools and equipment by disgruntled employees. In the spirit of cooperation, created protocols and systems, this streamlined day-to-day operations. Implementation of these changes resulted in low turnover, improved customer retention and a solid ten-year averaged growth of 38%.

A Restaurant in Prague, Czech Republic, Europe
Number of employees – 73

In the 1990s as Eastern Europe was celebrating its newfound independence they were also wrestling with how to evolve their business models to adapt to Western business standards. In 1995, I began advising a number of companies in this region on improving their business models so that increased profitability could be reached through a combination of good systems, enhanced management to employee communication and dramatically improved customer service.

One of my favorite clients was a restaurant on Wenceslas Square, in the center of tourist foot traffic and business lunches. They had contacted us because they realized that they were not experiencing the repeat business from business parties and worse – had, on a weekly bases, tourist simply walk out due to lousy service. I met with the business partners and suggested that over the next week I go under cover as a patron. They agreed and for the next several weeks tuned from Business Adviser to Mystery Shopper. True to what I had been told, service was slow and inefficient. By comparison with other restaurants and eateries, the food quality was inconsistent and mediocre – where from time to time, it was great, but generally served lukewarm. As time progressed and I established a rapport with the wait-staff and began conversing with them to find out what from their perspective – “was going wrong?”

“Oh, we just work here, Honza politely replied, but I guess we are not motivated because we are paid little and the tips are lousy.” I looked at the menu and realized that for average lunch items (around $20 US, and dinners starting at $35, then tips should be a lot better than their average return of 2 – 4%. Especially with consideration to the tourist trade.

It was recommended that we conduct an in-depth employee survey with encouragement for honest candid input and assessment. This included their perception of management and customer inter-action and experience. An immediate fundamental change regarded tipping. Whereas the previous system was based on a joined tip jar, now each wait-staff member was tipped on his/her individual performance. From a western business perspective, this was a no- brainer. But in the 1990s, many businesses were still running from a Communist cultural mindset.

Benefits and Results: Employee turnover decreased by 82%, tips increased by 61%, return customers increased by 64% and profits increased by 58%.

Summary:
Here are some basic things to keep in mind for increased employee performance:
1. Encourage employee empowerment and responsibility
2. Develop processes designed to give your employees the ownership to take care of each customer as if they were their own personal guest.
3. Always look for ways to create respect, cooperation and harmony between staff and management
4. Weed out the poor performers and the culprits who bring toxic energy into the office environment.

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