Tag Archives: employees

MBWA–For Managing in Troubled Times

I have always been a strong proponent of “Managing By Walking Around” (MBWA). I have studied the concept, and written about it, but, more importantly, I have practiced it for several decades. I have experienced the benefits…and there is no downside. For me, informally talking with my employees frequently, whether individually or in small groups, is the single best way I found to build cohesive teams that can fulfill a common purpose.

Never has this been more important than it is today. Employees are constantly bombarded by the negativity of mainstream media sources (we all know bad news sells best), and consequently, rumors abound. That is why it is up to each small business owner to spend as much time as possible communicating with the people who make their business run. Sadly, big business has lost site of the power of this simple act. HP was probably the last big corporation to formally practice MBWA, and that was many years ago.

Of course, just walking or wandering around, by itself, won’t do it, you also have to talk to people—everyone—and make sure your message is consistent, or you will quickly be disregarded. Keep your employees informed about the realities of your business, both the good and the bad. Nothing dispels rumors and fear like the unvarnished truth. Nothing builds trust and respect like factual, frequent information—the sharing of everything that is going on.

Just as important, you have to listen to your employees. All employees talk amongst themselves about the business, and usually they know things about your business that you do not…so, ask them what they think. Ask them what the business can do better. Ask them what you can do to help them do their jobs better. Be sure to really listen to what they have to say, and then thank them. Of course, you do regularly thank them for their contributions anyway—don’t you?

The same holds true for people outside your organization…your customers, suppliers, creditors, bankers, investors, board members, etc. Pick up the phone and call them from time to time. Where appropriate, ask how you can help them. Everyone connected with your business needs to hear from you—everyone is anxious about what is happening, and when they are fully informed and connected they also can help you, and your business, in ways you may never have thought of.

Frequent and consistent communication not only makes for an informed organization, but it provides the basis for meaningful communication between everyone. This is what fosters innovation.

Doesn’t all this MBWA stuff take a lot of time? Well, it does take a dedication of time consistently spent out in your workplace, but not as much as you might think. If you make it part of your daily routine, and your overall management style, MBWA will become second nature and a part of your business culture—and it definitely beats the hell out of “meetings.”

Do you MBWA? If not, give it a sincere try—spend more time with the people who make your business successful. You can make everyone in your organization feel they are a real part of your business. This is what can give you a better chance of winning during the recession…and beyond.

What Can We Learn From Costco?

In their November 2008 issue, Fast Company magazine featured an interview with Jim Sinegal, CEO and cofounder of Costco. While most retailers are whining about the economy, in August Costco had an increase in same-store sales of 9%. The reason for this is very simple; there are no secret programs, or special incentives to buy there…just good old-fashioned business sense. Here are the key points in Jim’s interview that we can all learn from.

  • Don’t gouge your customers. The interviewer pointed out that some suppliers still balk at Jim’s policy of not marking products up more than 15%. So much for supply and demand marketing.
  • Treat your customers well. Jim: “Customers shop with us for value. They don’t shop with us for cheap prices on cheap merchandise. They expect us to deliver value on quality….The final analysis is, the customers vote at the checkout.” This is something for all of us to remember.
  • Treat your employees well. Wall Street complains that Costco treats its customers and employees better than they do their shareholders. They pay their workers an average of $17 per hour, and 90% of health insurance costs, for both full-time and part-time employees. Yet, revenues have grown 70% in the last five years, and their stock has doubled.
  • Know your competition. Jim: “Hardly a week goes by that I’m not in a Sam’s.” Do we study our own competition that closely?
  • Try new things. Sales on Costco’s e-commerce site are expected to hit $1.6 billion this year, a 33% increase over 2007. Coffins are one of their big e-commerce sellers. Who would have thought?
  • Do not be afraid to fail. Jim: “You don’t have enough space in your magazine to talk about all the things that we’ve tried that didn’t work out.” How bold are we about trying new things?
  • Manage by walking around. Jim: “You know, there certainly are days when I’ll visit 12 (stores). I will be traveling to our warehouses every single week between now and Christmas…I try to approach the visits from the standpoint of the customer. Does the building have the right goods out? Is it well stocked and clean and safe? Nothing is a bigger turnoff than poor housekeeping.” Spending quality time with our customers and employees is going to be one of the keys to surviving this recession.
  • Be innovative. Jim: “We just reconfigured our cashews. They were in a round canister, and we put them in a square canister. It sounds crazy, but we saved something like 560 truckloads a year of that one product.” In today’s chaotic world, innovation is not optional.
  • Keep overhead low. Jim answers his own phone and sends his own faxes. I read somewhere else, a while back, that Jim uses the same desk, in the same small office where he started 25 years ago. Many of us can take a lesson from that.

Obviously, Costco is a reflection of its CEO and the values he brings to his business. But then, aren’t all our businesses a reflection of the values of the owner?

Something to think about.