Savage Strategy #2
Drive Decision Making Down,
Yeah We've Heard this Before!
Savage Strategy Number Two is: “Drive decision making down.” Drive decisions down to the lowest possible levels. Mull over decisions you are making and see which ones you can delegate. Are you a controller? This strategy will get you really nervous. But by the end of my article, I will convince you that you can drive decisions down and still maintain control.
Most of you use FedEx. But you may not realize that each FedEx employee has quite a bit of decision-making power. If you have a package that is delivered late, did you know you could call FedEx and get up to $100 credit on the spot? You don’t have to be put on hold while the customer service rep consults a supervisor. You get a decision on the spot. Doesn’t that make you feel good? Doesn’t that make you want to keep doing business with FedEx?
Have you ever been put on hold for five minutes while someone consulted a supervisor for a decision? Did you get just a bit irritated? What if you had to wait 30 minutes? You got very annoyed. And what if you had to wait a day? You probably went to the competition.
How many of you have flown Northwest? Do you remember when it used to be called Northworst? They had the lowest ratings of all airlines in customer satisfaction surveys. A few years ago, they changed. They gave each flight attendant and each ticket agent a book of coupons. If a passenger had a problem, each employee has the power to give away a free round trip ticket anywhere in the country. Northwest is no longer called Northworst. And it gets the highest customer satisfaction ratings.
Let me tell you about my own business. It gives me great pride to tell you we gave our employees all kinds of power back in the 80’s, before the idea of “empowerment” became popular. We gave them much more power than the $100 FedEx gave their people. And we went way beyond Northwest’s free round trip ticket. We told our customer service reps they could do ANYTHING to make the customer happy.
Our business was fund raising. We had a small company with a big name, Institutional Financing Services. IFS for short. We made products for schools to sell to raise money. Our specialty was fashion jewelry. Our average school bought $5000.
I wish you could have met Anna Hilde. She was our first customer service rep. She was 28, enthusiastic, intelligent and passionate about her work. Within three months, she was managing ten other customer service reps. My two partners and I told Anna: “Look, Anna, we want you to make decisions. And we want your people to make decisions. Don’t ask us what to do. Just do whatever it takes to make the customer happy. Pretend IFS is your company, Anna, because you really do own the customer service department.”
Then we got all ten of the customer service reps together. “We have asked Anna to make decisions without consulting us. Now we want you to make decisions without consulting Anna.”
About the same time we hired our first professional manager. We needed a controller. His name was Roscoe Rusthoven. So picture this. The company, IFS, had three crazy entrepreneurs full of ideas, 10 customer service reps full of enthusiasm…and Roscoe.
Roscoe thought we were nuts. He did not like to let those customer service reps make such important decisions. “It won’t work. They’ll give away the company. We’ll go broke.”
Within six months, Roscoe began to come around. He analyzed the decisions our customer service reps had made. He did not like to admit it but most decisions were sensible with very few mistakes.
Yes, they made mistakes. But we said to Anna, “Go ahead and make mistakes. It’s OK. If you ask us to make the decisions, we’ll make mistakes also. And you’ll never grow. If you make a mistake, we’ll analyze it calmly, but we’ll never get mad.”
We told them, “Look, these schools are buying $5,000 a year from us on average. That means they will buy $25,000 over the next five years. Let’s not lose that school over a stupid little $50 misunderstanding. If you think they deserve credit, or a prize, or extra merchandise, that’s your decision. Even if the worst should happen and the school wants to cancel the sale and return $5000, you can accept it without consulting us.”
You should have seen the letters we got. I remember a school principal who wrote me and said, “IFS is the best company I have ever dealt with. Your customer service people are enthusiastic and they can take care of every situation on the spot.”
You are probably thinking, “OK, Steve, that works fine with 10 employees. But I work with 1,000 employees. You can’t let them make those kinds of decisions.”
Well, let me describe how our company grew. We went from 10 employees to 600. And our sales went from zero to $60 million in six years. And our philosophy never changed.
It was not easy. As we grew, we had to hire more professional managers like Roscoe. We needed experts in production, operations, quality control, and management information systems. And you know what they wanted. More rules! Yes, every day we discovered a new rule. They would impose a rule. We would remove a rule.
You may be wondering about a couple of things. I can just hear your question, “Steve, what about training these people?” Yes, you are absolutely right. You must train them. You don’t simply tell your people, “OK, you’ve got power. Make decisions. You’re on your own!” What we did was have weekly sessions in which all employees who dealt with customers brought up case studies of problems they confronted and strategies they created. Everyone got to talk. We learned and stimulated each other.
You may also wonder about employees who simply don’t want to make decisions. That’s fine; there are plenty of jobs for them. But keep them out of the front line. Don’t let them deal with customers. You want your customers to deal with people that can decide.
When you organize yourself around Savage Strategy #2, I guarantee you will make more sales, more often.
Our customers continued to get the special Savage treatment. We grew to $60 million. Then Colgate Palmolive came along and asked, “What’s it going to take to buy you?”
We sold at a nice price, but I was not about to retire. I will never retire. I continued to work with Colgate for five years, opening up subsidiaries of our fundraising company in Mexico, Guatemala, Costa Rica, Colombia, Venezuela, Argentina and Brazil.
In each country, I worked to instill Savage Strategy #1 – drive decisions down. It is one of the key strategies I use in my consulting business as I work with companies throughout the Western Hemisphere. You may be intrigued to know that Savage Strategy #1 is even harder to instill in Latin America than it is in the US. Our Latin American managers were used to bureaucracies with lots of rules. They had a hard time letting go. But when they got the idea, it made our company unbeatable. Our customers loved us because no one treated them like we did.
I travel throughout the Western Hemisphere, helping companies dramatically improve their sales and marketing strategies. I love to experience each country and its unique culture. I could spend hours talking with you about each country’s culture. But my purpose is different. My job is to help you make more sales, more often. Therefore, I’m going to talk with you about a different kind of culture. My theme is your corporate culture. And my message is this: you must change your corporate culture in order to survive in the 21st century.
Does change make you feel uncomfortable? You did not invite me to make you comfortable. Some things I talk about are going to make you uneasy. Have you ever felt culture shock when you travel to a foreign country? Do you get a feeling of apprehension and anxiety, as you move about in a culture that is not your home?
You may feel perturbed with some of the things I propose. And when you go back to implement these ideas, you are going to cause culture shock throughout your company. It will not be easy. But it will transform your company. And you will make more sales, more often.
You will leave here with a lot of enthusiasm but when you get back to your office you may feel a bit awkward introducing these strategies to your co-workers. You may even worry that they think you’re a little weird. That’s how I felt back in college. I was embarrassed about being a missionary kid. I wanted to be normal, like everyone else. I thought I was strange and did not talk about being a missionary kid. After a time, however, I found out that people were fascinated and they loved my stories. And as you can see, I have built the missionary theme into my seminars and speeches.
So be bold. When you talk to your colleagues about Savage Strategies, let them know they can let go of decisions and still maintain control. Tell them, “Let’s trust our people. They can make good decisions. And that will give us more time to think about strategy and long-range planning!”
Can you see how it affects your employees? It makes them happy to work for you. It makes them feel important. They will make good decisions. Trust them. And you will make more sales, more often.
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