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No Cost Motivation – Make sure you do it correctly

October 10, 2009 By Dee Gardner Leave a Comment

I just read this article The No-Cost Way to Motivate – BusinessWeek by Patrick Lencioni.

The article basically suggests that managers need to be more aware of the lives of the people the manage. I think it doesn’t go far enough. HappyPuzzle

I believe managers should have conversations with people they manage. Then need to listen and find out what need, what they want, and what their hopes and dreams are. Not only should we listen, but we should try and find ways for to meet those needs and wants. Of course they need to be appropriate, timely and prudent.

While I hope managers will do these things I know few will take this advice. But I can hope.

I have had hundreds of people who work for me. Many of those people, given the chance, would come to work with me if I called them up today. Because they know I listen and respect them.

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Freedom Beats China by Accident

September 27, 2009 By Dee Gardner Leave a Comment

Another anecdotal story about Owner thinking.

Running around, like chickens sans a head, two partners had started a company. They were spending 12-14 hours a day just to get a few orders out the door. They had a bunch of employees and One employee did nothing but try and keep track of the orders. And they were just barley scraping by making about $20,000 a month. If a customer had a problem, they didn’t get help and became a lost customer.

Step in the web guy/ savior / accidental implementer of Owner Thinking. The partners originally contacted him for just a little help with some simple functionality for customers to be able to submit requests for work to their website.

The Web Designer/programmer also did another thing that most technical people don’t do. He went to the company and worked in their facility for a few days to see what their processes were.
He presented them with a plan to be create a work flow system using the web. It took a couple of months but he built a system that would receive the request for an order. and then track it through the production process. He also created a queue to handle problems.
All of the production was done on a computer. A customer, from any where in the world, would send a picture that the to company to convert into a program that would be used by embroidery machines to stitch the picture onto fabric.

The second key to success and was the owners had been paying the employees per design to produce the artwork. This is a key to getting the employees to think like owners.
The employees realized the more work they did the more money they made. They also realized if the design came back, because of quality issues, they would have to fix it for free. Because of this they did things right the first time. They were thinking and acting just like the owner would. This coupled with the new work flow system ignited a firestorm of new business.

In just 6 short months they had gone from $20,000 a month to over $90,000. The owners were no long involved in the production and could focus on promoting their business. They had also reduced the amount of production employees by more than half. I think it was from 10 people to 4 people.

One of the other effects was that this company started being able to compete with China for orders. They were doing the work faster, better and at less of a cost to the customer.

How can this be? Because the employees were free to think like owners.

You pay an employee an hourly wage or a salary to create a slave. You give a person the freedom to create, innovate and control their own destiny you create a loyal patriot. A patriot that will work extremely hard for that freedom.

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Working less makes you more money

September 4, 2009 By Dee Gardner Leave a Comment

Results of their study were in and they couldn’t believe what they found.

My cousin is one of the owners for a company that copies legal documents.

They were looking for ways to try and make more profit. One of the ways was to figure out how much work their employees were doing and maybe get them to do some more work. They had been keeping track of who was doing what jobs and so they started researching what every employee did.

The were a little surprised by what they found.
The oldest, more loyal employee was doing the least amount of work. I was talking to my cousin and explained to him she had been there the longest and had figured out better than anyone how to look like a good employee without doing more work. He agreed.

It’s been a year since I had the conversation and so I gave him a call to see what had happened. He said that employee no longer worked there and he had a great crew now. They are being more productive. He believes some of the younger workers only work hard for a couple of years and start to slack off. He said his crew was a little more mature and he thinks they are working harder.

This also brings up a good point. Most of the time pay-for-performance isn’t something managers never understand. They all are thinking things are running smoothly and the company is profitable. Why do I need to fix something that isn’t broken.

And most people will go on with their lives.

This is the question are you willing to do what it takes to make the change?

I know I can help my cousin’s business $100,000 more in profit every year. Oh well his loss.

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Blood dripping from the knife

August 31, 2009 By Dee Gardner 1 Comment

With blood Dripping from the knife in his hand, and looking at the lifeless body on the table. The man came to a sad realization there were not going to be any more golden eggs.

Too often managers, like the man with the knife, kill the goose laying the golden eggs before they realize their greed.

Working in South Carolina I had an office that was running pretty smooth. There were about 35 employees and things were going pretty good. We even had the prospect of more work getting shipped our way. We had three Kodak high speed document scanners. They could scan, according to kodak, 120 pages a minute. In a perfect world maybe, but in truth we could only average about half that speed. Even with averaging half the speed the person scanning could make about $12 dollars an hour in the pay-per-performance strategy we had setup. It was okay but some of the people that were preparing the documents for scanning were making more more money. I believed it was a bit unfair to the scan operator because they were limited by the speed of the machine.
Kirk Kirpatrick, an other manager in the office, who was older and wiser than me had identified them as the bottle neck in our operation. He determined we needed to do everything we could to keep those running. This made me aware I needed my best most reliable people running those machines. I didn’t realize it at the time but I needed a way to make that the best job in the office.

Then it happened, one of the scan operators came in and told me he was quitting, he was working two jobs and he just wasn’t getting enough sleep. After he left the office, before it really hit me the impact it was going to have, the other two operators, Jim and Brad came in and wanted to talk. They told me they didn’t want me to hire a new scan operator. They figured they could run two machines at once. I was skeptical but I was willing to give it a try. I found out they knew he was going to quit, and may have even encouraged it.

What they realized was that if they could share the other scanner they could effectively get a 50% increase in pay up to $18 dollars an hour. This helped me solve two problems: First, I didn’t have to hire a new employee and. Second, this made the scanner operator job one of the highest paying in the office.

Jim and Brad also knew we were getting more work and another scanner in a couple of months and the would effectively get another raise to $24 dollars an hour where both of them could run two scanners all the time.

Another huge issue for site was deadlines. We were recieving about 75,000 documents a day and we had about a 7 hour window to get all those scanned. if you do the math average 60 documents per minute, per scanner you can get about 3600 an hour times 7 hours is 25200 per scanner times 3 scanners is 75600 documents scanned per day. we really didn’t have much time to spare.

Having Brad and Jim use two scanners had a few unforeseen positive effects. First, because Jim and Brad needed all the document counts of the bundles to be perfect to make the most amount of money, they quickly identified people that were counting poorly. I realized the more work that had to be rescanned because of poor counting decreased our efficiency and put us in greater jeopardy of missing our deadlines. So I realized that our counting accuracy needed to be watched like a hawk. We put rules in place for counting quality.
So as a result of focusing on the quality our office had the best record for not missing deadlines.
Because of our efficiency we were able to have the people start later in the morning. We originally began work at 3:00 AM. Because of our efficiency we soon moved the start time to 4:00 AM. Eventually when we got the fourth scanner we were able to push the start time back to 5:00 AM, even though our work load had increased to 125,000 documents a day.

We had discovered our golden goose and it was giving us a golden eggs pretty consistently. We had changed the thinking of the employees and now they were thinking and acting like owners. The scan operators were now consistently making $24 dollars an hour.

One day I got a call from boss with a concern. He said “I see you have a couple of guys that are making close to $25 dollars an hour.” “So What?” I asked. He said one of the most ridiculous things I have ever heard. “We can’t have employee making that kind of money.” He asked how they were doing it. I explained they were using two scanners instead of just one. He said “we need to make a new rate so if people start using two scanners the get a different rate.”

Knowing what had gotten us to this point I was angry with the greed I was hearing. My boss was standing there with his knife greedily ready to cut open the golden goose looking for more gold. Luckily for me I said to him “So we are going to punish our best people for having a good idea and working hard?” You paying the same thing you are paying everywhere else but getting better results. He realized what he was doing and put away the knife. I convinced the managers in other offices to follow my lead to do the same thing with two scanners per operator. Efficiency and quality increased through out the company.

I have several other stories that do not end so well. I had a friend who was working as a consultant for a small firm. The firm had setup a bonus structure so that consultants made more money by being efficient, working hard and making sure their clients were happy. Many of the top consultants quickly figured this out quickly and started working very hard. Many of them were making close to $200,000 a year. As a result of thinking like owners the company as a whole was out performing it’s competition. This attracted the attention of a larger company and they wanted to gain some of gold that this company was producing. So they acquired the smaller consulting firm. The first thing they did was changed all the compensation packages and took away the bonuses and incentives that motivated the consultants to think like owner. They had basically gotten out there knives and when hunting for gold. All the top performing most intelligent consultants stopped producing the gold. The immediately started looking for better opportunities, and with the reputation of their former company, there were all able to get jobs at other firms quickly. Within one year all the top consultants had left the company. The bigger firm’s management was probably standing around, holding their blood stained knives, wondering what happened to all the golden eggs, probably thinking that smaller company pulled a fast one.

Another story was a construction company Las Vegas Nevada, during the housing bubble of the mid nineties. One of the tasks they needed done was trash hauled away from sites. They were paying drivers by the load. However, they were getting behind and were looking for better ways to get the job done. They gave the drivers an insentive. They would pay them more if they filed a trailer and towed that behind their truck. The trailers held the same amount of stuff as the dump truck. One of the drivers caught the vision and started thinking like an owner. He had to work harder, but he figured out ways to be more efficient and pretty soon he was making lots more than any other driver. He was also moving more trash than any other driver. The company he was working for got out their knife looking for more gold. They changed the way they were paying the double drivers. The really efficient driver realize he was now getting penalized for doing all that extra work and stopped doing the extra work to load the trailer. They had killed their golden goose.

I am always looking for more stories like this. I have heard this is a common occurrence in sales departments. If you have a story like this. I look forward to hearing your story.

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Gluing rocks together is Awesome!

August 24, 2009 By Dee Gardner Leave a Comment

The day after high school, my dad being the nomad that he was had decided, instead of trying to stay in Sacramento after the owners we were renting from decided to move back in, we were going to move to St. George Utah. A little town with about 35,000 people. One stop light, a country music station, a tiny state college and more sage brush and tumble weeds than you could fit in Texas. Any way you get the idea.

The lamest thing was having to leave our friends, the girls we loved and My great job. To make matters worse when we got to St. George the house we moved into in St. George was a dive. My dad hadn’t even seen it before we moved there. Any way I went looking for a job. My mom had gone to college there in the 60′s and knew a couple of people.

One of her friends hooked me up with a job cleaning the cafeteria at the college. I was supposed to work 3 hours a night, after the cafeteria was closed. I worked for about a week with the guy I was about to replace. I remember thinking this guy is soooo slow. I had been busting my butt for over two years. I knew how to clean fast. Well after the guy quit I could get most of the work done in about 45 to an Hour. I approached the manger and asked if I could just get paid for 3 hours and when ever I got done I could go home. He thought it was a strange idea. And I think he thought I was trying to cheat him or something. I was completely bored. This was my second experience with soldiering. Soldiering was term coined around the turn of the century in factories though out the world. This is were everyone works along at the same slow pace to not make anyone else look bad or work to hard. If you are by yourself you just have to make it look like you are busy when there is nothing else to do, so the boss will pay you a full days wage. Mostly ridiculous.

My brother and I were pretty social and I had found a couple of girls to have fun and date. One of the girls was working at a place called Fellerstone and she said she was making 4 or 5 dollars an hour and she might be able to get me a job. It sounded good to me. They were looking for some extra help and I soon found out why it wasn’t a big deal to hire another person. They were paying piece-rate. But I soon found out what a wonderful thing piece-rate was. (Piece-rate is a form of pay for performance). My task was to glue lava rocks together. I got paid .01 for every rock I glued together. Eventually they would form lava arches, statues, they were called. The statues, were attached to a piece of rock. These statues were sold to pet stores to be put into fish tanks. I got really good at gluing rocks together. I could easily do 1200 an hour, and could sometimes do 1600 an hour. Gluing them onto the base was $.02(2 cents) and I could do 800 to 1000 of those an hour. But I because of the work space and drying time of the glue. I could only work for about 3 hours a day. This was great for me because I was going to college and could come back and forth between classes. And the girls all worked after school. You have to remember this was 1988 in a tiny rural town were you could work at minimum wage $3.15 job and buy a house for $35,000. Here I was 18 making $15 to $20 an hour making 5 to 7 times what any of my friends were. Most of the girls were making $4 or $5 dollars an hour and that was great.

I worked there for about 6 months and then I volunteered to serve a mission for my Church. I was asked to serve in Micronesia. I gave my two weeks to the owners. The owner said, we are sorry to see you go you were produced a ton of stuff. He asked me “What do you think you were making per hour?” I told him $15 to $20 an hour. Almost immediately, without thinking, he said “Wow, I am only paying the foreman $11.” I hadn’t told really told anyone before that. However, I did tell a couple of the girls after that, and I guess it got around the plant. It caused quite a commotion because everyone in the plant wanted to swith to making “lava statues.” I don’t think they sold very well because they stopped making them.

Once again, without realizing it, the owners had gotten me to stop thinking like an employee and start thinking like an owner. It is amazing what can happen with you get people “Owner Thinking”

Interesting to note about FellerStone. Throughout the years I have wondered into pet shops and looked for fellerstone products. In many cities across the US. I’d say over 90% of the pet stores I have been into have Fellerstone products, but I have never seen a lava statue in a pet store.

In 1988 Fellerstone also had several other jobs were they were using pay-for-performance. However, I spoke with owner in 2007 and they were no longer using pay-for-performance (piece-rate) in their plant. I scheduled an interview with him and went to his plant. But that particular day he had something come up and I didn’t get the chance to ask him why.

Pay-for-performance can be your golden goose, but many times owners and managers get greedy and kill their golden goose, by miss management.

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My first experience with Pay for Performance

August 22, 2009 By Dee Gardner Leave a Comment

I want to show in this story that thinking like an owner helps people to work harder and think like an owner.

When I was about 14 I wanted to start making my own money and looked for things to do. My brother mike and I went around the neighbor hood and asked if we could mow lawns. I picked up a couple of jobs, but but nothing significant. We also handed out a little local weekly paper. Noen of this was making much money, but it was a little something.

About the time I was 15 a local guy hired me to work on Saturdays. He paid me minimum wage a the time witch was 3.15 an hour or something like that. Sometimes it was hard work, but most of the time I just had to look busy, because there wasn’t enough work to do. He picked me up and dropped me off. So I couldn’t just leave when the work was finished. I really hated the job, because I spent a lot of time wishing I was at home sleeping.

A couple of months before my 16th birthday I talked to one of my friends who was cleaning a butcher shop in a local grocery store. He was ready to take a new job. He wondered if I was interested in a job. It sounded good to me they were paying $6 an hour. And it only took one and half hours a day 6 days a week $54 dollars a week. The coolest thing about this job was they would pay me the $9 no matter how much time it took to do the job. If I hustled I could get done in an hour. So while the rest of my friends were working for minimum wage. I was making $9 an hour. The store didn’t make me clock-in so my start time was flexible. The other deal was that if I wanted a day off I had to find and train a replacement. I don’t think they realized it but the were making me think like an owner. I work this job for two and a half years. There was only one time durning that 2.5 years that I wanted to take a night off and I couldn’t.

It was a great job I learned how to work hard. I learned that having control over the situation made life more bearable. It also created a desire to have this type of flexibility in all jobs. I didn’t even realize I was owner thinking until later on in life when I looked back on the situation.

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