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Intellectual Capital

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Intellectual Capital

In this week’s Lifelong Learning post, Founder and Managing Member Ron Slee continues to look at employees as assets. Read on to learn about Intellectual Capital.

In an earlier post on Lifelong Learning, I posed a question to you – “Are your employee’s assets or expenses?” I hope every one of you said they are assets. Today I am wanting to look at your employees from a different perspective. I want to look at your employees as an “Asset on your Balance Sheet.” Imagine if you took all of the knowledge, skills and experiences of your employees and were able to put it into a container?

Look at the skills required to operate your business.

Selling. Leading. Buying. Repairing. Maintaining. Data Storage. Warehousing. Shipping. Receiving. Transportation. Ordering. Purchasing. Stocking. Paying Bills. Payroll. And there are many more.

On top of that you have the specific skills within each discipline. Take selling as an example. The function requires Research, Goal Setting, Asking Questions, Overcoming Objections, Explaining Benefits, and Closing the Sale. Each job function can be dissected into the differing skills required to perform it. That is one of the byproducts of our Job Function Skills Assessments. Most of us view a job simply as that. I would ask that you look at it in a different manner. Each job is a composite of a lot of different items. Let me go in a different direction for a moment. Let’s look at the job of a surgeon. What is it? Is it simply using a scalpel and cutting. Or are the years of training given to the surgeon expecting that they will see with trained eyes and identify problems inside our body and then knowing what to do about it? Of course, it is the latter, isn’t it?

So, when people take our assessments, they are taken aback at some of the questions. A typical comment coming back to us after the employee completes their assessment is that I wasn’t aware that was part of my job. If we look at the telephone and counter selling job function, most of the employees have done it for a long time. They typically are on autopilot. However, they are often extremely busy. They don’t have time for many niceties. That is a shame. That is a result of not having enough people to do the job properly. That is the negative result of sales per employee. (Too many “bosses” think that a high sales per employee is a good thing. That is totally wrong. Completely wrong) Customer retention. Customer loyalty. They are critical measures of your success as a business. Market share is another.

Well in the parts business over the past forty years market share in parts and service has dropped by more than 50%. Many of you will argue with me as a result of your sales revenue continuing to go up. Perhaps many of you will point to the proliferation of competitors as the cause of this reduction. I will respectfully disagree. This drop in market share is a direct result of too few people serving customers doing too much work. 

Look at your service department as a good example. Surveys done by industry associations point out that 15% of the customers who purchase labor from an equipment dealer “defect” each year. Let me express that another way for you to better make my point. 15% of your service customers STOP buying labor from you on an annual basis. That means that you lose 50% of your customers over a five-year period. Don’t believe me? Check it out. Get a report in name sequence. Alphabetically. Compare the list from five years ago in a calendar year to the current year. In our case today compare 2021 to 2016. That is a gap of five years. Get the total number of customers in 2016 and compare that to 2021. In many cases the number will be very close to the same. Now go through and compare the two lists side by side. Name by name. How many names purchased labor in 2016 that did not purchase in 2021. I suspect you will find the number to be a very sobering illustration of the point I am trying to make with you.

In parts it is not as stark a defection rate but it is equally as disturbing.

Your employees are assets for your business. They are the people that create the glue, that bond your customers to your business. Too many of you view, these employees, your heroes, simply as tools in a toolbox. Nothing could be further from the truth. The sales per employee metric is given lip service. It is not the trigger that it should be used to hire people. In the 1980’s the sales per employee number, widely accepted in the industry was $600,000/parts employee/year. That number did not include the Parts Management nor the Product Support Sales team. For many of the dealers with which I have worked over the past five years that sales per employee number exceeds $1,000,000/employee. That means that the people working on your counters and telephones serving your customers are overworked. From the 1980 metric 5 people were required to do $3,000,000 per year. That job today it is being done by 3 people. How can this be allowed to happen? 

There is a very old expression. “You reap what you sow” The market share reduction is a direct result of this excessive sales per employee. It is a result of the employee NOT being viewed as an asset but as simply a tool to be used. This is wrong. It needs to change.

The time is now.     

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Ever Wonder?

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Ever Wonder?

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In this week’s installment on Lifelong Learning, guest writer Mick Vaught challenges readers to truly assess our paradigms and pre-conceived ideas in “Ever Wonder?”

Ever wonder why we tend to remain in our comfort zone and never see a paradigm shift coming around the curve? 

One of my all-time favorite role models growing up was Stephen Covey and his book titled “The 7 Habits of Highly Effective People”. In my opinion, this was his finest publication ever because it really changed my views on many things.  This book was a real game changer for me. Of the 7 habits he prescribed, habit number 5 “Seek first to understand, then to be understood”, was the most useful for me during my journey in the construction industry. I look back now at some of my biggest mistakes in dealing with what I thought was critical in problem solving, only to realize later that I did not understand the root cause of the various issues. 

A good example of what I’m talking about was my preconceived notion of how to correct the overwhelming problem of developing and retaining top notch service technicians. Like many well intended experts, I believed the best approach was to offer better wages and benefits than the competition with hopes that money would be the answer. What I didn’t understand was the critical needs of the service managers, technicians, and most importantly, customers. Over time, I gained a better understanding of the many issues and how to address these issues. Here are some of the initiatives I found to be most appropriate.  

Step 1:  Identify the scope of the current needs, and those in the next ten years.

  • Determine current utilization of techs based on OT and customer service response times.
  • Measure machine populations, aging of company rental fleet, trends of growth and new skills required. 
  • Determine and log the current CSA requirements and new product lines introduced or proposed for the future. 
  • Rank the current staff skill sets by determining specific strengths and weak areas and score each tech on an equal and consistent measure process. 
  • Chart the aging of current techs and estimate potential replacement cycles. 

Step 2:  Analyze the current mix of jobs, and skills required for the work. 

  • Determine % of Level 1 jobs currently being performed through work order analysis.  (Cleaning, Greasing, PM services.)
  • Determine % of Level 2 jobs requiring higher skill levels. (Inspections, Pre-deliveries, basic electrical and hydraulic repairs.)
  • Repeat same review of Level 3 jobs requiring troubleshooting, diagnostics, basic welding, major component R&I and exchange, equipment software usage and understanding. (Tech Tool, Matris, etc) This level will require factory and on-line training requirements for specific areas of knowledge. 
  • Finally, all Journeyman level jobs requiring unlimited skills to be able to perform all troubleshooting, diagnostics, major repairs, component rebuilds, welding, and complete knowledge of equipment software, fault code analysis, Tech. Tool, ,  etc. This level will require completion of all manufacturer online training modules, and attendance at numerous factory training programs. These techs should be targeted to customer jobs as a priority. 

Step 3: Rank the current service staff.

  • Create the same four tier tech classifications to match the service jobs and attempt to match the skills to the job.
    • Level 1 – Apprentice
    • Level 2 – Shop Technician *
    • Level 3 – Senior Technician *
    • Level 4 – Journeyman Technician, Shop / Field **

    *Requires supervisor sign off, and training requirements.

** Requires GM sign off and required training completion and testing. 

  • Pay levels are made consistent with Tech classifications, as an incentive to move up in classifications and knowledge. 

Step 4:  Recruitment

You now know the needs of what tech levels are required to meet the existing needs, as well as future requirements through business growth, changing technologies, retirements, and tech development and promotions. 

Recruiting Apprentices:

Today, tech school students are being drawn to the less “dirty” jobs upon graduation by trucking companies, HVAC companies, Major Rental companies, etc.  Recruitment has become very competitive and many companies start there in high school years by attending college job fairs. 

We need to be active in these recruitment sessions and offer significant incentives to draw the prospect to the construction industry.  The biggest obstacle facing a student after graduation from a tech school is the tuition debt they have incurred, and the expense of buying tools to start work. We will prepare incentives to address these two issues:

  • Tuition Reimbursement Program: 

The student would be reimbursed for his existing tuition debt over a period of employment as a technician with the company.  This four-year program would refund 25% of the student tuition expense every year, with 100% refunded after four years. It would be required that the student achieve a minimum of a Level 3 technician to qualify for 100% reimbursement. 

  • Tool allowance program:

The student would be given a basic tool set and toolbox to start his apprenticeship program. These tools would remain the property of the company until the employee has completed his Level 1 apprenticeship period and was elevated to Level 2, (Shop Tech). The tools would then become the property of the tech.  OR, an upfront $2500 tool bonus that would need to be paid back if the employee left in the first year. Further, a $1000 tool allowance will be given to the tech on an annual basis up to the Level 3 classification, and then receive the standard company tool allowance.  

Recruiting Senior and Journeyman Technicians:

The needs of these techs are different.  They are looking for job security, good pay, good benefits, a clean, safe workplace, nice field trucks, and more quality in the job.  To draw these potential techs to leave their current employment and join our team is more difficult, complicated, and costly. 

  • Address their concerns: 

Recruitment in regions where work opportunities are transitioning, can appeal to the job security concern. For example, the coal fields of KY and WV offer little job security at this time, and in the future. These techs are looking for what they are going to do going forward.  You can offer job security with the vibrant growing markets. You need to heavily advertise in all transitioning areas. 

  • Provide a safe, clean and modern workplace.  It is important that the facilities and shops be kept clean and updated, along with providing the tools necessary to do their jobs. Service trucks are very important to field technicians that view these vehicles as their homes on wheels. This is a very big consideration for a field tech to join your team from another company. 
  • Provide excellent training opportunities.  No tech wants to get to a job and not know what to do. Offering year-round training sessions online and at the manufacturer is a big draw for those who do not have it now. You need to market and sell that. 
  • Have specific guidelines in place to include relocation expenses, temporary housing, storage, and relocation assistance services, as required. 
  • Offer all techs an annual tool allowance, boot allowance, and specialized skills training, such as welding, MSHA certifications, etc. 

Overview:

The company will need to have a structured, consistent approach to the recruit process that will provide for the needed demand in the years to come, and fill the vacancies created by tech aging and retirement.

Balancing the tech skill levels to the work difficulty levels is difficult, but provides the best profitability to the service department, and the best customer support to the end users. 

Did you enjoy this blog? Read more great blog posts here.
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Transitions In Our Education System

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Transitions In Our Education System

In this week’s post for Lifelong Learning, founder Ron Slee takes a hard look at some of the transitions in our education system, and why we need those transitions now more than ever.

I come from a family of teachers. My grandmother was a teacher and my mother taught. We have been teachers for over one hundred years. My grandmother taught in a one room schoolhouse. Educators seemed to be all around me. My mother chose all of my teachers in grade school. She was the Vice Principal at the school, and I couldn’t get away with anything. But for some reason I always used to watch my teachers and how they worked. One thing a lot of us forget is that the “teacher” is typically the only person that we see at work when we are children. 

I remember one particular teacher of mine in High School. He taught high school boys health. A subject that really gets the attention of teenage boys, right? He did some amazing things to keep us engaged. He used facial expressions, he used his voice dramatically, he used body language. He used everything he could think about to keep our attention. It made quite an impression on me. Over my career and involvement in training and teaching one thing always has stood out to me. You have a responsibility to keep the attention and interest of your students, your audience. 

I also remember another teacher who had a Master’s Degree in English and he was teaching Mathematics. His first class with us is indelibly etched on my mind. He said, “if I can learn to teach you mathematics with an English education all of you will pass this class.” He meant it and he delivered. Everyone passed. Several of my classmates had trouble with Calculus and they had to spend countless hours work after the school day ended. This teacher never left them. He was committed to the success of this students. It was his life. 

Teachers are special people. They are more influential in the development of a child’s intelligence and knowledge than nearly everyone else. We start with parenting before a child goes to school. Then we transition from preschool to grade school, to middle school, to high school and then to more serious learning either in the technical world or the academic world. Both of those paths of development are beneficial to society. The goal of the education system, in my mind, is to create work ready people for the business world, not JUST expand knowledge and learning. This is true whether that person becomes a doctor or plumber. 

Ed Gordon, President of the Imperial Consulting Group, a man who has devoted his life to teaching and education and employee development, has written around twenty books. The one that got my attention was titled Future Jobs, Solving the Employment Skills Crisis. He has written a series of papers on Job Shock, which we have published as blogs. He has pointed out something very significant to me. The First Industrial Revolution required reforms to the education system to create math and literacy. Prior to that we were hunters and gatherers and farmers. We are now in the Fourth Industrial Revolution. We have the same need to reform education. We need stronger analytical skills; we need better communications skills and better critical thinking skills. 

That means teaching will have to change once again. 

Teaching will have to transition to something different. We have to continue fulfilling the traditional role of preparing children to be able to enter the workforce. However, we are also now facing the need to create an adult reeducation program. No longer will the skills we obtain before the age of twenty-five be sufficient for our typical career. Science and Technology and Computerization and Artificial Intelligence and other advances will make our skills obsolete. The education system will have to be able to provide updated skills so that people will continue to be employable. 

This creates a wonderful challenge for us all involved in helping people learn. 

Traditional education has had a teacher in the front of the room. What I have called the “sage on the stage.” This model requires physical plant, a school, with classrooms and teachers and in some models with a teacher’s aide. This is an expensive model. Further this model clearly doesn’t work with the world that we live in today. We should not leave any person behind in the world. That means that we cannot stay with the current model. We need to move to the internet to bring learning to a much broader audience. In different geographies, Africa and Asia, where we don’t have the infrastructure, we have no choice but to seek out alternatives. 

We have examples and models available to us today. For instance, we have a very accomplished scientist who teaches at MIT. His name is Eric Lauder. Dr. Lauder also happens to be an amazing teacher. And there are others around the world. Dr. Lauder teaches a class at MIT called “The Secret of Life.” He has cameras in his classroom that record the class. This class then is put up on the internet and is available to anyone who has access to a computer and the internet. The same curriculum, the same homework, the same everything. This is an example where you have a subject matter expert who is an exceptional teacher, available to the world. Imagine that. 

Our classes at Learning Without Scars are complicated. Most of us who started into training on the internet started with a slide show that is the foundation of any class that you are putting on with a group of people in the room with you as students. The transition is then to try and have audio tracks tied into the slides to portray the messages you would have just as if you were in a classroom. That is a typical internet-based class. We do it differently. 

We would like to believe that our structure is a complete class. Required reading that is followed with a quiz to prove that you understood the reading material. Each class is built as a series of videos consisting of slides, and audio tracks and film clips, complete with close captioning, wrapped up with a quiz at the end. We have five to ten segments in each class. The transition is easy to go from one segment to the next. Each student receives an email upon the completion of each segment. One class I completed recently had twenty emails. Then we have a final assessment for the class. You must achieve an 80% score on the final assessment to pass the class. Then we ask each student to complete a survey, to help us continue to improve our products, and finally the certificate of achievement. The certificate includes the number of CEU’s that are earned in the class and apply as academic classes in other schools. (Our CEUs apply to other schools; technical schools, Junior Colleges, State Universities and private Universities.) Our subject specific classes now “feel” like a school program, no longer an internet-based slideshow. 

This is part of what we foresee as the transition on education. The arrival of the internet as a learning platform. Of course, there will be many iterative changes, but we have to make higher quality learning available across the world to anyone who is interested not just those that can afford it.      

The Time is Now.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.

If You Don’t Do It, Who Will?

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If You Don’t Do It, Who Will?

Curriculum designer Caroline Slee-Poulos brings this week’s post on Lifelong Learning with “If You Don’t Do It, Who Will?”

If You Don’t Do It, Who Will?

I’m sure we have all heard the quote “If not you, who? If not now, when?” attributed to both Theodore Roosevelt and John F. Kennedy. Despite the hazy origins of the quote, it is relatable for most of us.

After all, if we don’t take ownership and get things done, then who will?

We take that ownership attitude throughout our businesses, right up until the moment a budget for training and employee development comes to the table.

We expect our employees to come in the door, armed with all of the knowledge they need to be successful in our businesses. We expect this when they come in with a freshly inked diploma, showing they’ve graduated from high school. When they don’t have the skills right off the get go, we bemoan the state of public education.

Here’s the thing: even if your brand-new hires came to you with the foundational knowledge they need in order to succeed and be an asset in your business, don’t you want them to continue to level-up?

We know that there is a skills gap for high school graduates. Due to budgets, some of the trade programs that were commonplace in high schools for years have been entirely closed down in some regions. Even if that were not the case, doesn’t your business need people who can use the new technology, whether it be on the shop floor or in the dealer business system, as it changes and updates over time?

Our businesses and our industry are not stagnant: they change and adopt new methods, systems, and technology. History has shown us that it can be tough to be an “early adopter” of technology. As a result, we can try to delay making necessary changes. Our customers need more from us. If we don’t provide the necessary training to keep up with what our customers expect and need, then how can we expect to retain those customers?

I propose that employee development – training and continuing education for your staff – is as critical to the success of your business as the work order process in your shop. It creates a team culture in your business, and shows your employees that you are just as concerned with the future as they are. Plus, it gives you the opportunity to see your employees receive the exact education you need them to. Don’t you think it is time to put the training of your employees into motion?

After all, if you don’t do it, who will?

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.

Learning As a Way of Life

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Learning As a Way of Life

In this week’s post on lifelong learning, Ron Slee tackles the difficulties of making time for ourselves in “Learning As a Way of Life.”

Should Learning be a Way of Life?

Over my career and involvement in training and teaching one thing has always stood out to me. The amount of time and effort that we devote in our lives to our own personal health and development seems always to come last. Imagine that. We spend our time working, in many cases the same job for years, and we don’t do much if anything to get to another level of opportunities.

A number of years ago my wife and I took a vacation. A nice vacation for a couple of weeks. During these two weeks, I spent each morning looking out at magnificent scenery while I was on a treadmill. That is when it struck me. I had not spent any time at all on my own personal health and wellbeing. I don’t think I am alone in this regard. We get into ruts in our lives. We have our personal lives and our professional lives and we get to a place where we have everything under control and we are comfortable with our lives. Or so we think.

So, when the vacation was over and we returned home I reverted to my normal life which left no time for me.

During the time I was teaching in a classroom, I always asked the class to tell me about the last book that they read. Rarely had anyone read a book in the last thirty days, or ninety days, a few had read a book in the past year. Does that remind you about the time I DON’T invest in myself? The people in my classes rarely did anything in the form of reading that helped them develop as individuals, either in their personal or professional lives.

I think it is long past the time when we should be investing in ourselves.

When I worked in dealerships, I regularly got a book for the members of my team. We all read the same book and set a day when we would talk about that book and share with each other our impressions. It was always enlightening to all of us. We were talking about our personal impressions, with no filters. No judgment, no one was right or wrong, we were just talking as people. I found that the team became much closer as a result of this exercise. You should try it, or something like it, with your teams. Maybe even in your family if your children are old enough.

Recently my granddaughter moved to Hawaii to take her Master’s Degree at the University of Hawaii. It is a real joy for us to have her this close. During the past six weeks or so we have spent a lot of time together and those of you who know me reasonably well can imagine the conversations we get into with each other. As you know I am a contrarian. I love debating. And it really doesn’t matter which side of the debate I am on. During this time my granddaughter has figured me out and we now can have some really vigorous debates about darn near any subject you want to talk about. That is also a joy for me as it shows me a person who is growing in their thinking and communications styles.  

Recently I was talking with the President of a University and I was asking him what he viewed as the most significant elements of learning that the students coming to university were lacking. He was very clear in those three things.

  1. Critical Thinking Skills
  2. Analytical Skills 
  3. Communications Skills

I was intrigued and we talked about it for some time. It would appear that when the US introduced the “No Child Left Behind” program, the teaching became more about teaching to a score on a test than teaching people to think. Of course, in some parts of the U.S., a low test score was grounds for firing a teacher. Learning the subject matter should be the primary objective, of course. Learning to think and develop your own intellect was also a priority. It would appear that aspect of learning was less prioritized in the face of so much high stakes testing. To this University Leader it showed.

I would like for us to get much more serious about our own personal development. As you know one of the goals for us at Learning Without Scars is to help everyone identify their individual personal potential. Then to get on a path to achieving our potential. That applies to all of us. Caroline and I are in this mode constantly. She is much more effective at it than I am as she has held a full-time teaching job while at the same time involved in personal development with a mentor once a week and completing her own Master’s program in education. I feel like a slacker beside her. But think about that for a moment. Caroline has put embedded learning in her life. 

Writing this blog has renewed my commitment to put learning into my day-to-day life. I read constantly. I recommend five books in each of our Quarterly Newsletters so each of you can be stimulated to do the same thing. The newsletters all have four main subject areas; parts, service, selling and business. They are in the form of a separate document which I wanted you to use for Continuous Improvement in your work.

I am very fortunate in that I am exposed to people that take me out of my comfort zone when I do Zoom calls and create our Podcasts and YouTube and Vimeo Films. I am challenged to explore a subject on which my guests are subject matter experts, and I have a conversation with them that can be helpful to our Learning Without Scars audience.

But I am entering a new phase in my life. It seems that the changes will never end. I am going to embed Learning into my day-to-day life, and I invite you to join me in this new phase.    

The Time is Now.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.