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People…

People…

Guest writer Andy Fanter returns tonight with a blog about people…not to worry, it’s a good thing. Connections and relationships with people matter, at work or outside of it.

Back in 2018 I hunted with a friend who manages thousands of acres for non-resident landowners. This involves mowing, planting food plots, building duck and deer blinds, airport transportation, caring for homes clients buy in area. My friend needed a strong number two, and I convinced him to hire a friend in the business that was looking to make a move. This year, my friend fired my friend—not surprised the guy he hired is good with people and good with the field work, and my friend hiring was more interested in “ labor” not a leader. I had not talked to my “ hired friend “ since 2020, but when his wife texted me the news that he was fired last week—I responded, “  Can I fix it? “  I was willing to make a two-hour drive to see if I could repair it—the consultant in me. My skilled friend already has another management job, so my offer was not needed.

Last week had me driving to take care of some business. I passed a recent ex-client headquarters enroute, but coming back I was passing it at 10 minutes before noon. I know my ex-client pretty well, we are even friends, I stopped and asked the front desk if he was around. She said “maybe,” and a successful hunt for him started. She was shocked that I just took a chance to see if he was around, but I have known this person 25 years. My friend was happy to see me, bought lunch, and our business relationship mended. We got caught up on 18 months of news. Some may know the name of the client—yes, we are both Gen X and more than a little opinionated!

Well great Andy—there are three people on earth who do not use a cuss word before your name….what does this have to do with construction machinery business and dealers? Never get too big, too mad, or too distant to try and help people. I say it often; the toughest clients to get are the ones you lost. But have you tried getting them back?

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Navigating hidden fees in transportation fleet leasing agreements

Navigating hidden fees in transportation fleet leasing agreements

Trucking Industry expert Bob Rutherford shares an article from Brian Antonellis on the financial side of the industry: “Navigating hidden fees in transportation fleet leasing agreements.”

Throughout 2024, one of the most discussed topics across industries has been “hidden fees.” Both consumers and businesses are increasingly frustrated with the lack of transparency in pricing, pushing companies in various sectors to reconsider their fee structures. While businesses like hotels and rental car companies, have begun disclosing add-on charges to be more transparent, the prices we see advertised often don’t reflect what we actually end up paying – a challenge that’s particularly significant for companies managing heavy-duty transportation fleets.

These hidden fees pose a major challenge for companies that operate heavy-duty transportation fleets and their leasing structures, especially those locked into a “Full-Service Lease”. As these fees continue to grow, companies are becoming more aware of their impact on financial stability, and they are seeking alternative leasing options that offer greater transparency and cost efficiency.

While some argue that fees are necessary to cover operational costs and clarify where money is spent, the reality is that hidden fees, often referred to as secondary fees, can significantly affect how much consumers and businesses ultimately pay. According to the Consumer Financial Protection Bureau (CFPB), these fees not only inflate costs, but also hinder the ability of businesses to make informed financial decisions.  CFPB data suggests that because these fees are hidden, companies often pay more than what would be expected if all costs were upfront and transparent.

The current white house administration has prioritized addressing hidden fees, commonly referred to as “junk fees”  estimating that Americans collectively pay over $90 billion annually in these charges. Legislative efforts are also gaining traction, with bills introduced to curtail excessive and unnecessary fees. States like New York, Illinois, and California have begun implementing regulations aimed at curbing these hidden fees across various industries, including restaurants and other service sectors.

The hidden cost of fees in fleet management.

Although hidden fees have recently gained widespread attention, the issue has been brewing for years, particularly since the pandemic. The need for flexibility and agility became paramount in fleet management, making it crucial for companies to scrutinize every detail of their fleet’s vehicle lease structure. This close examination became a deciding factor in whether businesses could maintain profitability amid changing economic conditions.

During the pandemic, the ability to scale fleet size in response to fluctuating demand was essential. This flexibility required lease agreements that could adapt to changing needs, such as a Sale-Leaseback option.

However, hidden fees within Full-Service Leases have only compounded these challenges, highlighting the importance of transparency in fleet leasing.

Understanding full-service leasing.

A Full-Service Lease is an agreement where the lessor bundles financing and various transportation services into a single monthly payment

While this might appear convenient it often results in a lack of flexibility for the lessee. These contracts typically lock businesses into long-term commitments with combined costs for maintenance, finance, and other administrative fees, making it difficult to adjust to changing operational needs.

The case for unbundled leasing

On the other hand, Unbundled Lease (UBL) agreements offer a more flexible alternative. These agreements break down costs individually, allowing companies to identify and control the lowest possible expenses associated with fleet management.

UBLs provide financing options based on actual costs, rather than estimates made at the beginning of the lease term. This approach also supports better vehicle life cycle management, optimizing both costs and performance.  With a UBL, companies gain the freedom to scale their fleet size and upgrade vehicles as needed, ensuring that they only pay for what they use. This flexibility often translates into significant cost savings when compared to the rigid structure of a Full-Service Lease.  

Calculating the savings with unbundled leasing.

After accounting for lease payments, maintenance fees and warranties, a company could save significantly with a UBL. For instance, a fleet of 100 trucks might save $1.04 million in the first year alone by opting for an unbundled lease structure, with monthly costs averaging $2,054.00 per truck compared to $2,921.00 under a Full-Service Lease.

Maintenance and repair costs based on lease structure.

One of the key differences between a UBL and FSL is how maintenance and repair (M&R) costs are calculated. Full-Service Leases often “front-load” these costs, meaning companies pay more upfront regardless of actual usage. In contrast, unbundled agreements allow companies to manage these costs more effectively, typically resulting in lower expenses over time.  

For example, under a Full-Service Lease, a company might pay a fixed fee plus mileage charges from the start and in the early usage of the asset, without benefiting from manufacturer warranties or cost reductions over time. However, with a UBL, maintenance costs can be significantly lower, with companies only paying for the services they actually need. This can lead to additional savings, particularly in areas like tire replacement, where costs can add up quickly.

Beyond maintenance, other aspects of fleet management are also affected by hidden fees. 

Original equipment costs under Full-Service Leases are often higher, and additional administrative fees can vary based on location. Fuel costs can also become less transparent, with bundled services making it difficult to track true expenses.

For companies operating large transportation fleets, understanding and mitigating these hidden fees is crucial for maintaining a healthy bottom line. As the industry continues to evolve, organizations with transportation fleets must stay vigilant in managing their Total Cost of Ownership to ensure they are operating as efficiently as possible.

Brian Antonellis, CTP, is Senior Vice President of Fleet Operations at Fleet Advantage, a leading innovator in truck fleet business analytics, equipment financing and life cycle cost management. For more information visit www.FleetAdvantage.com. 

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Are driver-facing cameras becoming a necessity?

Are driver-facing cameras becoming a necessity?

Trucking Industry expert and Learning Without Scars guest writer Bob Rutherford shares an article this week by Angela Coker Jones. In the trucking industry, one potential safety tool is hotly debated: are driver-facing cameras becoming a necessity?

Dash cameras have been on the market for years now – many of which offer a driver facing video solution in addition to road facing video, which has become pretty standard in the cab of a truck as fleets seek to improve safety, exonerate themselves in accidents and lower insurance costs.

Inward-facing cameras are still very much a novelty, said CarriersEdge President Mark Murrell. According to data from the annual CarriersEdge Best Fleets to Drive For survey and contest, only 21% of finalists use inward-facing cameras.

“It’s got a long way to go before people get comfortable with those,” Murrell said.

It’s no secret that most drivers don’t like driver cameras. Some fleets have chosen to invest in them anyway because of their safety benefits, and many have been successful in gaining driver approval. But driver satisfaction, privacy, and the fear of losing drivers when seats are already hard to fill has led some to avoid them.

Boyle Transportation and Skelton Truck Lines, sister companies owned by Andlauer Healthcare Group, are two carriers that have chosen to forego the driver-facing camera – at least in their over-the-road operations. The companies do use driver-facing cameras in trucks that run local routes, but much of their OTR driver population consists of women, which has led the companies to eschew them out of respect for their women drivers’ privacy concerns.

Mike Lasko, vice president of safety at Boyle and Skelton, said he would like to have driver cameras in the OTR fleet, but there are no plans whatsoever to install them.

“But that’s entirely driven by our safety performance,” Lasko said. “We have an industry-leading safety record. If that wasn’t the case – all of a sudden, if we went from first to last – that might be a different conversation, but we’re not experiencing any need to invest in that as of right now.”

The companies originally invested in side-view cameras before adding road-facing cameras to their fleets. Lasko said they were experiencing a high volume of pedestrian vehicles sideswiping their trucks. In one instance, he had a man call the number on the back of a truck and say one of their drivers came into his lane, causing him to run into a side rail. The camera showed the man was actually texting and driving.

Exoneration, Lasko said, was the driving factor that led the companies to invest in camera technology in the first place.

“The police show up and, of course, everybody’s story is the big bad truck changed lanes and hit me,” he said. “Almost overnight, once we deployed the cameras, we were able to exonerate ourselves from all kinds of false claims.”

Most carriers launched their foray into cameras with dashcams. That’s what Garner Trucking did about three years ago. Garner Trucking Chief Operating Officer Tim Chrulski said they “ripped the band-aid off” and implemented a dual driver- and road-facing camera all at once rather than testing an outward video solution first to see how it would go.

And he swears by the driver-facing feature. A big reason for that is because the camera system Garner uses – like most others – provides driver alerts that help the driver self-coach and improve poor driving habits they may not have otherwise realized they had developed.

He said most behaviors can be easily corrected. In the event of habitual poor driving maneuvers or an accident, Garner uses the driver-facing video not to punish a driver but to coach them based on their actions.

“The whole (saying) perception is reality; that perception in that moment of having an accident may be well off from the reality of what actually happened,” Chrulski said. “For a driver to be able to see and acknowledge that this was a situation that could have been corrected, there’s no better training. We all learn from our own mistakes, our own errors, so I think it’s a positive thing. It doesn’t have to be a negative thing.”

Silvia Mesina, director of safety at Real Trucking, agreed. She said her company uses cameras to proactively address potential safety hazards before they escalate into accidents by monitoring driver behavior like distracted driving, drowsiness, or aggressive behavior, for example.

Real has also implemented road-facing, side-view, and backup cameras. The side-view and backup cameras were installed to give drivers greater visibility, eliminating blind spots and mitigating backing accidents during the drop-and-hook process. The company recorded thirty-seven backing accidents in 2019. Near the end of that year, backup cameras were installed on a portion of the fleet, and by 2021, Mesina said that number had almost halved to nineteen.

She said while these auxiliary cameras help drivers enhance their road safety awareness and accident prevention skills, those additional views can’t replace the value of driver-facing cameras.

“Driver-facing cameras are crucial for driver safety,” she said. “These cameras play a crucial role in enhancing driver safety by providing invaluable insights into driver behavior.”

But Lasko said there are other safety systems that can provide insight into driver behavior without recording them. He said it depends on the type of advanced driver-assistance systems (ADAS) a fleet has in place. They “have all the ADAS” at Boyle, so a driver camera is redundant, he said.

“ADAS will tell you if the driver was paying attention,” Lasko said. “Sure, I can have a video of them being distracted, or I can just figure it out from the data that we have from all the other active safety systems.”

But if a company is light on ADAS, he said a driver camera is a good option.

In addition to exoneration and driver coaching, Murrell said driver cameras are becoming pertinent to insurance operations to explain why a company is a good risk as they use the insights into driver behavior to paint a picture of a company’s safety culture, which can be invaluable in the event of an accident.

“This is just my opinion, but if you’re a carrier operating with cameras, and you’re [only] using an outward-facing camera and side cameras, you’re only getting 70% to 75% of the story,” Chrulski said. “There’s another 25% that happens in the cab, and if you need to be able to defend the driver, defend the organization, you need to have 100% of the information.” 

Angel Coker Jones is a senior editor of Commercial Carrier Journal, covering the technology, safety, and business segments. In her free time, she enjoys hiking and kayaking, horseback riding, foraging for medicinal plants and napping. She also enjoys traveling to new places to try local food, beer, and wine. Reach her at AngelCoker@randallreilly.com.

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How Dealers Can Better Understand Their Customers

How Dealers Can Better Understand Their Customers

Guest writer Debbie Frakes shares a blog this week to further highlight the importance of the customer satisfaction survey in, “How Dealers Can Better Understand Their Customers.”

One of the most powerful tools that equipment dealers have at their disposal is customer satisfaction surveys. They are the best method for understanding what you are currently doing very well and where you need to improve. These surveys provide insights into what your customers think about your products, services, and processes, and they will uncover any issues that need to be addressed.

How customer satisfaction surveys will benefit your business

  • Increase customer retention by 30% – 40%.
  • Identify problems quickly.
  • Show your customers that you care, creating stronger relationships.

If you’re on the fence about conducting customer satisfaction phone surveys, consider the statistics. Dealerships that regularly survey their customers typically see a 30% to 40% increase in customer retention compared to those that don’t. The reason is that the dealers who conduct surveys can fine-tune every aspect of their business—whether it’s equipment service, sales, rentals, or parts—by quickly solving problems as they hear about them from their customers through surveys.

Phone surveys by an outside company help you pinpoint points of stress or difficulty before customers decide to take their business elsewhere. Often, customers with recurring issues won’t voice their concerns directly; they’ll just leave. However, when a third party contacts them by phone to ask about their experience, customers provide candid feedback.

Why conduct surveys over the phone?

Phone surveys are particularly effective for gathering customer feedback, because they generally yield better response rates than email surveys. Our partner Winsby, for example, reaches a customer on every third call, and 97% of those they reach agree to participate in the survey. That’s a far cry from email surveys, where a 2% response rate is considered good. Another advantage of phone surveys is their interactivity; customers can elaborate on their concerns, and the caller can ask follow up questions. With email surveys, it’s often unclear whether the recipients even read the questions!

It’s also a good idea to use an external party to conduct the surveys, rather than someone at your dealership. Customers are usually more forthcoming with an outsider, and they may feel more comfortable discussing issues with someone they haven’t worked with directly.

How customer satisfaction surveys work

Our partner, Winsby, conducts phone surveys for many different equipment dealers across the country. Their first step is to create a calling script tailored to the key areas that matter most to your customers. For equipment dealers, these areas often include things like service responsiveness, parts availability, rental equipment performance, and new machine delivery time.

Once your script is ready, a specific number of customers are surveyed each month. That number is typically 10% of the number of invoices for the month for individual customers. Their callers then record all responses and promptly follow up on any negative feedback. Finally, they will communicate any issues identified to the relevant departments at the dealership quickly, so they can make it right with the customer and correct the situation to avoid recurring problems.

Winsby’s customer satisfaction surveys will help you improve every area of your business, retain customers that you are at risk of losing, and build stronger relationships with the companies you work with. It’s all about discovering problems and fixing them before they escalate and turn into customers leaving and speaking negatively about your dealership.

Contact Winsby today to start conducting customer satisfaction surveys!

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Beyond the Annual Review: Emphasizing Continuous Feedback

Beyond the Annual Review: Emphasizing Continuous Feedback

Guest writer Kurt Pease offers a blog on how to lead in your business in, “Beyond the Annual Review: Emphasizing Continuous Feedback.”

For years I dreaded my performance annual review, fearing a negative evaluation. I worked hard throughout the year, but due to a lack of timely feedback, I was uncertain if my efforts were aligned with the company’s goals. What once were lofty goals outlined at the beginning of the year often become overshadowed by the daily whirlwind of urgent tasks and responsibilities. To be blunt, I found that annual reviews were outdated and ineffective. 

As I transitioned into management roles, I quickly realized that a fundamental change was imperative. Instead of relying on infrequent yearly evaluations, I knew we needed to embrace ongoing conversations and collaboratively set achievable goals with my team. This shift not only enhances accountability but also fosters deeper engagement among team members. At the end of my career, I felt that I still had work to do, but the following changes helped me feel better about this important responsibility. 

  1. Employee Buy-In is Vital

One of the first lessons I learned in this process is the critical importance of employee buy-in. Goals set from the top down, without input from those who will be working to achieve them, are often met with resistance. By actively involving employees in the goal-setting process, we foster a culture of ownership and accountability. When team members feel their voices matter, their commitment to the goals increases significantly. It’s not just about compliance; it’s about a shared vision that everyone feels invested in.

  1. Aligning Company and Individual Goals

Another crucial step in this journey was breaking down broad company objectives into specific, actionable items for each employee. Clear alignment between individual and organizational goals ensures that every team member is striving towards a unified purpose. For instance, instead of setting a vague target like “increase revenue,” we worked on specific, measurable goals, such as “acquire four new customers per month.” This clarity provides a roadmap for success and helps team members understand how their contributions affect the bigger picture.

  1. Regular One-on-One Meetings

I started placing monthly one-hour appointments on my team’s calendars. Regular one-on-one meetings serve as a vital platform for open communication between me and employees. These meetings offer an opportunity to address challenges as they arise and allow for timely updates on progress toward goals. Instead of waiting for an annual review, team members can receive ongoing feedback, making performance management a daily part of our work culture.

Through these discussions, we have transformed performance management from a daunting event into a constructive and growth-oriented process. Employees feel more comfortable expressing their concerns and seeking guidance, which ultimately leads to better performance outcomes.

  1. Documentation of Conversations and Progress

To ensure that meaningful progress is being made, it’s essential to document conversations and track goal progress over time. Not only does this create accountability, but it also helps us visualize how we are moving towards our objectives. Utilizing project management tools like Trello has allowed me to effectively manage my team’s projects while providing a clear picture of collaborative efforts. I wished I had utilized this platform much earlier in my career. Not only did it help me become a more efficient manager, but also helped me become a highly organized employee. For example, during my own one-on-ones with my supervisor, having visibility into progress has been immensely beneficial. Together, we prioritize activities based on what’s most pressing, ensuring that we are making the best use of our time and resources. This transparency is crucial in fostering a collaborative team environment.

  1. Dynamic Goals Throughout the Year

One of the most significant shifts in my approach is the understanding that goals should be dynamic rather than static. As the business landscape evolves, so should our objectives too. Regularly reviewing and adjusting performance targets ensures that they remain relevant and challenging. This flexibility allows us to experiment and innovate, adapting our strategies to meet changing circumstances.

Encouraging an adaptive mindset promotes resilience within the team, empowering employees to pivot when necessary and explore new pathways to success.

Conclusion

By embracing continuous feedback and collaborative goal setting, I felt that I cultivated a work environment that is more engaged, productive, and fulfilling. The journey from annual reviews to a culture of continuous feedback and collaboration has been transformative, highlighting the importance of nurturing relationships and fostering a sense of ownership among team members. This proactive approach not only enhances performance but also helps create a positive workplace culture where employees feel valued and inspired to excel. 

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The Aftermath: Who is to Blame, Microsoft or CrowdStrike or both?

The Aftermath: Who is to Blame, Microsoft or CrowdStrike or both?

Guest writer Kevin Landers asks the question we all have asked after the recent CrowdStrike failures in, “The Aftermath: Who is to Blame, Microsoft or CrowdStrike or both?”

The recent lawsuit and threat of additional legal action by Delta has left many questioning who should be held accountable: Microsoft, CrowdStrike, or both?

You have to be living under a rock not to have heard about the incident. In mid-July, a significant IT outage affected 8.5 million Microsoft Windows machines, resulting in operational and financial damages estimated in the billions of dollars.

The Fallout Begins: Legal Actions and Blame Game

As the dust begins to settle, the next phase in such incidents, the lawsuit stage, has commenced. Shareholders have already filed at least one class action lawsuit against CrowdStrike, and Delta Air Lines might soon join the fray. In an interview with CNBC, Delta Air Lines CEO Ed Bastian revealed that the July 19th outage, triggered by a CrowdStrike update, cost his company half a billion dollars over five days. The airline had to cancel over 5,000 flights, and blue error screens were visible at airports days after the initial crash. Delta incurred significant costs, including physically resetting over 40,000 servers and compensating affected travelers.

Where Does the Responsibility Lie?

The primary question now is: who is to blame for this fiasco?

CrowdStrike’s Accountability

At the forefront of the controversy is CrowdStrike, whose apparent negligence led to the cybersecurity provider pushing a kernel-accessing content update through flawed QA-testing software. The criticism directed at CrowdStrike is severe and, many argue, well-deserved. Their oversight caused substantial operational disruptions and will likely face significant legal repercussions.

Microsoft’s Role

Microsoft’s role in this incident is also under scrutiny. However, the situation isn’t as straightforward. To understand this, it is essential to delve into the background of how Microsoft’s developer tools work.

Microsoft provides developers with various layers of access to the operating system, from high-level UI features to low-level system kernel functions. This tiered access system has traditionally ensured the safety of Windows desktop applications. However, a 2009 EU regulatory ruling forced Microsoft to grant third parties more kernel access, aiming to create a level playing field between third-party security vendors and Microsoft’s own products.

Opinions and Arguments

Argument 1: Microsoft’s Limited Accountability

Some argue that Microsoft cannot be held fully accountable, as they were compelled by regulatory requirements to provide more kernel access. The company was forced into a position where it had to allow third-party developers, including security vendors, the same access as its own products. From this perspective, Microsoft’s hands were tied, and the responsibility for the flawed update lies squarely with CrowdStrike.

Argument 2: Microsoft’s Responsibility

On the other hand, some contend that Microsoft still had a responsibility to ensure the safety and integrity of kernel-level code. Critics argue that Microsoft should have implemented more rigorous testing or alternative approaches, such as creating an out-of-kernel API for security vendors to use. The fact that a flawed update could cause such widespread damage suggests a lapse in Microsoft’s oversight.

The Broader Implications

This situation raises broader questions about Microsoft’s approach to software development. Has the company prioritized feature cramming and quick releases over quality, testing, and maintenance? The incident with CrowdStrike might indicate a shift in focus that could have far-reaching implications for the software giant and its users.

Conclusion: A Prolonged Legal Battle Ahead

As the legal proceedings unfold, it is clear that this will be a lengthy and complex case. Both CrowdStrike and Microsoft will likely face intense scrutiny as the courts determine who bears the ultimate responsibility. The outcome will not only affect these companies but also set a precedent for how similar cases might be handled in the future.

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The Data Insight Dispatch!

The Data Insight Dispatch!

Luke Komiskey is the Founder & CEO of DataDrive, a data consultancy providing managed analytics services. He shares here his first blog post for Learning Without Scars, “The Data Insight Dispatch!”

 Too often, organizations lean on manual, cumbersome spreadsheets for decision-making. With an ongoing partnership, DataDrive helps growing mid-sized organizations transform their disparate, messy data into insight – providing both the reporting platform and data team for delivering faster, informed decisions.

 Over the last 9 years, Luke has grown DataDrive into a worldwide team of highly skilled data professionals serving over 250 organizations including media agencies, public school systems, manufacturers, and more.

The Data Insight Dispatch!

This month, we dive into the journey and insights of Luke Komiskey, a data analytics expert who has navigated from corporate America to the adventurous realm of global travel with his wife. Now, he shares invaluable lessons on the transformative power of data analytics and its critical role in shaping the future of business and education.

A Journey from Corporate Life to World Exploration

Luke Komiskey’s narrative is one of transformation. Leaving behind the confines of corporate America, he and his wife embarked on a global journey before settling down to start a family. This adventure not only broadened his horizons but also deepened his understanding of data analytics’ potential to provide clarity in a world inundated with information.

The Heart of Data Analytics

Komiskey underscores the pivotal role of data analytics in helping business leaders navigate vast amounts of data. He highlights a key challenge: the integration and analysis of data from disparate sources. To truly leverage data, Komiskey advocates for a consolidated, trusted source that empowers informed decision-making. Dispelling common misconceptions, he emphasizes that flashy dashboards alone do not signify successful data use. Instead, he points to the extensive effort required to transform chaotic data into actionable insights.

The Evolution and Challenges of Data

Reflecting on his career, Komiskey shares early experiences in data processing and the intricacies of managing a parts business. He stresses the importance of rigorous software testing and a deep understanding of data analytics beyond surface-level metrics. He explores how historical shifts in commerce and technology have shaped the evolution of data analytics, offering insights into its transformative impact on business practices.

The Generational Divide and Future Trends

Komiskey notes a generational divide in adapting to innovation, with smaller businesses often leading the charge. As focus shifts from data analytics to artificial intelligence, he stresses the importance of leveraging data to maintain market positions through effective algorithm development. Despite technological advancements, many organizations still rely on outdated systems like Excel, highlighting a slow adoption of modern solutions.

Addressing Workforce Skills Gaps

Looking to the future, Komiskey deems data analytics crucial for addressing workforce skills gaps. With predictions that half the workforce may lack employable skills by 2030, he raises concerns about increased government dependency and critiques the inadequate focus on adult education. Komiskey categorizes the workforce into three groups: driven and curious, those with limited choices, and those uncertain about their future, positing that data analytics could provide much-needed guidance.

Education and Community Development

In his work with school districts, Komiskey manages applications related to student performance, emphasizing the need for holistic assessment and early intervention. He critiques the decline of physical education and educational priorities, shares experiences from teaching in Singapore, and reflects on community development. He discusses how data analytics can influence job perceptions and the necessity of critical thinking in an ever-changing world.

Embracing Change and Adaptation

Komiskey concludes with a call to action for embracing change and adaptation. He acknowledges the impact of automation and robotics on jobs, emphasizing the need for reskilling to adapt to new realities. By focusing on personal growth rather than mere productivity in performance reviews, he advocates for a more resilient and forward-thinking workforce.

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Slow to Hire, Quick to Fire… BS.

Slow to Hire, Quick to Fire… BS.

This post is a reprint of the article by the same name by Rich Cruz.

Antiquated Hiring Philosophy May Hamper Growth

Recently, I applied and interviewed for an open executive position at a well-established company in the construction industry. Despite its success and expansion, my experience with their hiring process raised serious concerns. After nearly two months of waiting for my first interview and being told the hiring decision wouldn’t be made for at least two more months in the future, I underwent three interviews and was asked to produce a detailed 30, 60, and 90-day plan. Excited to move to the next level, I submitted a high-level outline of a plan via email, explaining that I cannot deliver a full plan without knowing more about the company through examining and analyzing data. The hiring manager insisted on a full PowerPoint presentation, and he coupled his request with the statement, “I am slow to hire and quick to fire.” This led me to withdraw from the process. This phrase, often touted in business owner coaching or peer-group circles, prompted me to delve into why it might have some fundamental flaws.

 

The Myth of “Slow to Hire, Quick to Fire”

 

The phrase “slow to hire, quick to fire” has its roots in the belief that thorough hiring processes ensure better employee fit and swift terminations minimize the impact of poor hires. Proponents argue that this approach leads to a more productive and harmonious workplace. Indeed, some literature supports this philosophy, such as articles from Harvard Business Review and Forbes. However, from an Industrial-Organizational Psychology perspective, this approach can pose a detrimental threat to both individual and organizational performance. While hiring for fit for a position with a company should involve rigor, too many assessments, interviews, work samples, or other forms of evaluation can reduce the pool of candidates and pose risks to the organization.

 

The Downside of “Slow to Hire”

 

An unbalanced approach that does not emphasize timely and efficient hiring processes can create detriments for both employees and organizations. Some drawbacks include:

 

  1. Talent Drain: Lengthy hiring processes can lead to the loss of top talent. High-caliber candidates often have multiple opportunities and may not wait months for a decision. As Peter Drucker famously noted, “The best way to predict the future is to create it.” Creating a future with top talent requires swift, decisive action.
  2. Increased Costs: Prolonged vacancies can result in significant costs in terms of lost productivity and the expenses associated with extended recruitment efforts. According to Kouzes and Posner, effective leadership creates a vision and rallies people around it. Delays in hiring disrupt this vision and impede progress.
  3. Negative Candidate Experience: A cumbersome hiring process can damage an organization’s reputation. Candidates talk, and word spreads quickly about companies with inefficient recruitment practices. This can lead to a tarnished employer brand, making it harder to attract top talent in the future.

 

The Pitfalls of “Quick to Fire”

 

Similarly, organizations that fail to invest in their employees and nurture organizational citizenship behaviors (OCBs) with on-the-job training, coaching, rewards, and other reinforcement can suffer consequences such as:

 

  1. Cultural Impact: Frequent terminations can create a culture of fear and uncertainty. Locke and Latham’s Goal Setting Theory emphasizes the importance of clear, attainable goals for employee motivation. A “quick to fire” approach undermines this by fostering instability and mistrust.
  2. Loss of Investment: Hiring and onboarding can cost as much as 1.5 times a worker’s salary. Quick terminations mean the organization loses its recruitment, training, and development investment. Additionally, the constant churn can disrupt team dynamics and hinder long-term projects.
  3. Erosion of Employee Morale: The psychological contract between employer and employee has its foundation in mutual trust and respect. When employees see their peers seemingly indiscriminately terminated, it can lead to decreased morale, engagement, and loyalty. Positive Organizational Behavior (POB) framework – which highlights the importance of hope, confidence, and resilience in fostering a productive workforce – supports the consequences of broken psychological contracts.

 

Evidence from Experts

 

The literature from scholarly resources and best-selling authors offers insight into better ways to attract and retain top talent.

 

  1. Peter Drucker: Drucker emphasized the importance of nurturing talent and creating a culture of continuous improvement. His writings suggest that a balanced approach to hiring and firing, focusing on development and fit, provides a more sustainable workplace than extreme practices.
  2. Kouzes and Posner: In their works on leadership, Kouzes and Posner highlight the significance of fostering an inclusive, supportive environment. Leaders should focus on building relationships and empowering employees rather than relying on punitive measures.
  3. Locke and Latham: Their Goal Setting Theory underscores the need for achievable goals for individuals and work groups tied to organizational objectives. A hasty firing approach disrupts goal alignment and diminishes the sense of purpose within the organization.
  4. Angela Duckworth and Carol Dweck: Their research on grit and growth mindset, respectively, points to the importance of perseverance and learning from mistakes. Quick terminations deprive both the employee and the organization of the opportunity to grow and improve.

 

While “slow to hire, quick to fire” might appear as a catchy mantra, it falls short when scrutinized through the lens of Industrial-Organizational Psychology and leadership theory. A more balanced approach, emphasizing timely yet thorough hiring processes and supportive, development-focused retention strategies, is key to fostering a thriving organizational culture. My recent experience underscores the importance of evaluating not just the processes but potential employers’ underlying values and culture. Ultimately, businesses that invest in their people by balancing rigor with empathy possess a better chance to succeed in the long run.

 

References

 

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Good, Better, Best Rebuild Options

Good, Better, Best Rebuild Options

Guest writer Ron Wilson tackles the gold standard of componentry in this week’s blog post: “Good, Better, Best Rebuild Options.”

Over the years working in the service areas of a dealership (regardless of the brand) we have most likely heard the customer say the dealership “gold plates” the component rebuild. Which means: Price is too high, over builds the components, not providing options to the customers. 

Often the dealership will provide discounts on a rebuild to meet the customers’ pricing concerns. Discounting cuts into the dealers’ profit margins and doesn’t address the image of being overpriced. 

The dealership can address the complaint by providing repair/rebuild options that will meet the individual needs of the customer. The marketing concept “Good, Better, Best” (GBB) is a pricing and marketing strategy to address the various customers’ price points and the life expectancy of the component/machine. Below is a breakdown of the concept from the customer’s view:

  • Good:
    • Price level: Lowest
    • Quality Level Basic
    • Essential repair/rebuild with minimal extras.
    • Meets customer life expectancy of the component- just one more season, get it through this year and will the trade/auction/sell machine.
    • Minimal warranty expectation
  • Better:
    • Machine mid-life rebuilds.
    • Balancing out the component rebuild with the life expectancy of the overall machine.
    • Due to the increased level of rebuild an increase in warranty/life expectancy is expected. 
    • Increased price level due to increased level of rebuild (additional parts and labor) to complete the rebuild.
  • Best:
    • Highest level of rebuild.
    • Additional warranty coverage available
    • Higher expectations relating to the level of parts and labor required to complete the rebuild.
    • Maybe considered equal (or remarkably close) to a new component
    • Higher level of warranty coverage, with possibly extended warranty offering available

Benefits of the “Good, Better, Best” Strategy:

  • Market Segmentation: Allows the dealership to meet the needs of a wider customer base with varying repair/rebuild budgets and expectations. 
  • Customer Choice: Empowers and includes the customers in the repair/rebuild process to choose the repair/rebuild level that best meets their needs and financial capacity.
  • Revenue Optimization for the Dealership: Increases potential revenue by capturing sales across different price points. Many customers may be going to your competitors because the repair options are available within your dealership.
  • Provides standardized and consistency to the rebuild process: Standardization and consistency improves turn time, quality of work, and fewer job interruptions due to waiting for decisions from customers.
  • Upselling Opportunities: Provides the customers an opportunity to move up to a higher price tier based on the additional added value and features.

Implementation Tips

  • Clearly Define Features: Make sure each tier is well-defined in terms of features and benefits. A common understanding between those that have established the price, rebuilds the components, and the salesforce that communicates the various levels of rebuilds to the customers.
  • Transparent Pricing: Clearly communicate the differences in pricing and what customers get at each level. Utilize visual diagram/cut away images to show what is included within each rebuild level.
  • Customer Feedback: Use customer feedback to refine and adjust the tiers to better meet customer needs and preferences over time.
  • Regular Reviews: Periodically review and adjust the tiers to ensure they remain competitive and aligned with market demands.
  • Utilized the Dealer’s Rebuild History to Establish Rebuild Level: The dealers rebuild history can be a great starting point to identify which subcomponent to include in which rebuild level.
  • Work Closely with the Dealers OEM: Gain input from the OEM based on their historical information and awareness of other dealers that have already developed these offerings.
  • Visit with Your Customers to Identify what the various Repair Options should Include:  This can be done as part of a customer focus meeting, Parts and Service Sales team conduct interviews, and examine what the competitors are providing.

Using the “Good, Better, Best” pricing model can help businesses effectively segment their offerings, appeal to a broader audience, and maximize their revenue while being more competitive in the marketplace and providing a level of rebuild the customer can select that best fits their needs.

Look at the article “The Good-Better-Best Approach to Pricing. Why every company should consider a tiered model.”  Written by Rafi Mohammed and published in the September-October 2018 Harvard Business Review.

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The Art of Effective Systems

The Arts of Effective Systems

Curriculum Designer Caroline Slee-Poulos has been in training sessions for the past several days and decided to share some of the content in her blog post for this week, “The Art of Effective Systems.”

The Art of Effective Systems

First of all, I don’t think it’s an art. Today, I think it might be more like one of those Tough Mudder endurance events: sweaty, muddy, and something that makes you question your own motivations.

W. Edwards Deming, thought of as the father of the quality movement (along with many, many other achievements), stated the following:

“If you can’t describe what you’re doing as a process, then you don’t know what you’re doing.”

No problem, right? We all know what we are doing…on our own…in our own little silos. In our classes, we often describe the importance of agreement. Everyone needs to understand what it is that we do, and they need to agree that it is the right thing to do. That agreement piece can be a hurdle all its own, but it is time to check our own practices as well. Do we have the conversation in the first place? Does everyone know and understand what it is that we do?

In order for something to qualify as a system, it must be something that can be described, predicted, and replicated.

When you assess your systems, do they meet those three criteria?

Systems apply to the capital goods industry, but also to just about every industry and organization. When your systems are properly structured, the people within the system know how to function and what they contribute to it. They also support the other individuals in the system.

I invite you to look at the systems you have in place within your business. Are they functioning correctly? Are the systems the same, no matter who is doing the task? If not, what needs to change?

The analysis can only benefit you.

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