What McDonald’s Can Teach Us About Financial Recovery

July 28th, 2009 by admin

I believe there are four important lessons that can be learned from the remarkable turnaround at McDonald’s.

1. How you grow matters as much as that you grow. The financial services industry would have benefitted from a focus on “growth by quality, not by quantity.” Clearly, the “growth at any cost” credo of some led to exactly that: any cost.

2. Changing your business model may not be needed, but belief in it is. Start by asking yourself what business you are in and whether customers still have a need for it. If they do, commit to it — fully. At McDonald’s, we knew that people still “deserved a break today” and we were willing to let go of all other initiatives (many of them very exciting) in order to demonstrate unwavering commitment to the core business.

3. None of us is as good as all of us. It’s the system, stupid! Understanding that you are leading a system, not a company or a person, is a critical insight if you want to successfully change something large. McDonald’s is extremely good at this. To some people (me included), it is a frustrating process. It takes time. It requires buy-in and plenty of patience and tolerance from everyone. It also requires adequate policing, oversight and incredibly detailed measurement systems. This is tedious work, and intimidating to those being measured. But it’s needed.

Large systems work best with a hard-wired operating system in the hub that enables innovation, entrepreneurship and decision-making in the nodes. The Internet would not have happened without HTML. Our country would not have prospered without the U.S. Constitution. But it is worth all the pain. And it must start with the humility that you are in the service of something larger than your own institution. As we say at BE-CAUSE — the company I founded — a purpose bigger than your product.

4. Plan your work, and work your plan. At McDonald’s we created a “plan to win.” Some would argue that it wasn’t perfect. Perhaps it wasn’t, but we decided that it was. And we haven’t looked back. Even through tragic circumstances — losing two CEOs in less than one year due to tragic deaths — the plan stayed intact and is still central today to the focus and alignment of the organization.

Information as per http://blogs.harvardbusiness.org/cs/2009/07/what_mcdonalds_can_teach_us_ab.html?cm_mmc=npv-_-TOPICEMAIL-_-JUL_2009-_-STRATEGY2

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The Little Things That Count

July 24th, 2009 by admin

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by Ryan Manning
Ryan here, and I am back on the ezine assignment for a second time this month.  For this issue, I would like to share a personal story that I think you will find interesting and beneficial.  It revolves around little things and how they can make a big impact. 
 
Earlier this week my fiance, Meghan, had to go to the dentist for a root canal.  Something, I doubt, anyone looks forward to.  Perhaps you even cringe at the thought of it.
 
You might think that this is a tough business to be in – the place no one wants to go.  Where customers curse your name and are always disappointed to see you.  This endodontist has figured it out however.  Of course this lesson is about how you treat your customers, not about income (because you should see the cars parked in back!). 
 
Some of you are in a business with similar unfortunate crossings.  Hail storm sends you to the body shop, a car accident forces a call to the insurance.  Yet, I am willing to bet – most people would choose the tax preparer over the endodontist.
 
As I sat in the waiting room, I watched patients leave.  One by one, with smiles are their faces, politely waving to the receptionist.  I thought to myself – these patients must be in for a quick x-ray or check-up.  I thought, surely when my post-root-canal-fiance emerges a different expression will be viewable.  
 
I was wrong.  Meghan walked through the door with a smile and a shrug.  I asked how it went, and the typical response of “fine.”  Quickly followed by how nice everyone was and how she got to watch TV from a ceiling-embedded flat screen.  Somehow, I began to think I got shorted by reading magazines in lobby.
 
Granted, when she was finished and was probably at a sense of relief that its finally over; but I would still expect a feeling of disdain for the dentist and staff who spent the last hour drilling and chipping portions of her tooth.
 
So what is my point?  Well, this endodontist made a root canal a favorable experience – are your customers even this pleased after leaving your presence?  Do you have the comparables to stacks of magazines, comfy chairs, and flat screens that are all customer-centric?
 
I know most business do not operate like this.  We all know this because of the awful experiences we have – and these are with pleasurable industries like restaurants, theme-parks, and movie theaters — not with pain-inflicting, tooth-drilling, stress-inducing root canals.
 
See if you can identify ten little things in your business that could make an impact.  Because the truth is, it wasn’t the root canal that pleased Meghan – she still got the center of her tooth removed – it was all of the “other little things” that made the difference.
Ryan has a great point here. If your customer is not happy will they come back, pay you on time, or refer you to others. Ryan is part of a organization called the Glazier Kennedy Institute. It is a group of business owners who get together every month to learn new ways to market your business better in Indianapolis. If you are interested in knowing more information, contact ryan at email@nobsindy.com or see their website at www.NoBSindy.com.
reprinted with permission 

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How Does Your Company Deal With Instability

July 8th, 2009 by admin

Companies like Toyota, Southwest airlines, and Wal-Mart chose a different path. They do not keep pushing problems as big as a boulder uphill. These companies find ways to sidestep the problem. They “flatten the hill” (no pushing uphill). Basically they do not have to push a boulder at all. Do you fight your companies financial battles by fighting the boulder uphill? Do you find a way to not push a boulder at all by having strengths in your company to work through any issues.

See the book Going Lean by Stephen Ruffa for more ideas.

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Medical Facilities Blaming Everyone Else For Their Woes

July 1st, 2009 by admin

Medical facilities are having layoffs and scrapping or delaying building projects and more closings and mergers are on the way, industry consultants predict.

They’ll get taken over by somebody else, if they need to exist, and if they don’t, they’ll just be shut down. Most endangered are rural hospitals and urban ones in areas with excess hospital beds and a lot of poor, uninsured patients.

Hospitals are reporting that their donations are down, patient visits are down and their profitable diagnostic procedures and elective surgeries have decreased as people with inadequate insurance delay care. But those patients are turning up later at ERs, seriously ill, making it tough for hospitals to lay off nurses and doctors.

The Oh Woe Is Me Problems– stingy reimbursements from commercial insurers (whom are trying to make a profit themselves), even-lower payments that generally don’t cover costs for Medicare and Medicaid patients, and high labor and technology costs. Medicare and Medicaid is set to pay close to the actual cost, not much if any profit for the procedure itself, nor the salary of upper management.

In the past few months, patients and insurers have been paying hospital bills more slowly. As a result, some think hospitals will start demanding up-front payments for elective procedures, which will lose patients.

When I worked on a lawsuit for the state of Indiana I had to prove that Medicaid was paying the appropriate dollar amount to providers. I took into account the salary of the work employees, automobiles, insurance or supplies used. Amazingly, when the salary of the owners, administrators, top management was not included the amount paid did make a profit for the service rendered.

As insurance changes the salaries of the top management for medical facilities will have to drastically change and also for insurance companies top management.

Few hospital are willing to have a true cost consultant come into their facility, because they know they will find a huge waste of money in many areas. Hospitals and other medical facilities are using the General Motors Model and not the Toyota model.

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