LLH Enterprises

Our research shows that senior management wants their managers to change from a make-do culture to a disciplined, competitive, fast-paced culture with more ambitious performance goals, specific performance metrics and rewards, and clearer accountability. This requires managers to change how they approach their plan to better serve their customers, peers and the needs of the organization, not just to do a job. Think of your department as an entrant in a competition. One of your goals with your planning is to determine how your department shapes up with respect to the other departments or divisions in the company. Rate your department in the following areas as they fit with the corporate direction:

Anyone can write a plan. But writing a plan that focuses on the most important issues, is doable, and measurable and putting it into action is what makes you successful in the eyes of senior management and the eyes of your peers.

One of the business world's most universal rituals is the meeting. Most managers spend one-quarter of their working lives in meetings, and yet at least half of all meeting time is wasted. The biggest meeting problems are: getting off the topic with unstructured discussion or irrelevant talk, no agenda, no summary and no decisions made.

Great meetings don't happen-they are designed. The first thing you need for a successful meeting is an agreement among people that meetings are a time for real work to take place. While you may call meetings for a variety of different reasons, it is important to realize that different meetings require different kinds of conversations. For instance, a group can come together to generate ideas but not to make decisions. Other meetings are built around a conversation for opportunity where you do not reach a final decision but narrow down the field of ideas or options. Finally, there are meetings that are built around a need for action. The goal is to decide, to commit. For example, "We want to leave this meeting with three expansion ideas for this fiscal year."

If you are the manager don't assume that everyone understands the reason for the meeting or you can run into some basic problems: a brainstorming meeting where people are afraid to speak up because someone might shoot down their idea-or worse, someone might say, "Let's do it." Or you set a budget meeting, with a goal of action, and someone loops back to an idea that was rejected earlier-that will drive everyone else crazy. If you call a meeting, make it clear to people what kind of conversation the meeting is going to have and then impose a certain amount of discipline on them. If participants come to a meeting with clear expectations about how other people should act and then the meeting lives up to such expectations, the participants will feel like they've had a really good experience. If the meeting does not meet those expectations, then people will become upset, withdraw or always arrive late.

Set the rules of engagement for your meetings. For instance, start and end on time, have a clear objective and set rules on how people will act. This last point is critical. Some rules for how people should act are:

Keep the majority of your meetings to thirty minutes by boiling down the crux of the meeting to the following questions. What's the most important or interesting subject in front of us now? What are the most crucial issues facing us? What are the most pressing challenges we face? What opportunities do these ideas, issues, and challenges present? What actions can we take now?

Managers send nonverbal messages and verbal messages during meetings without realizing it. If you are leading a meeting, people expect you to move the group toward a decision, so you need to act accordingly. Running a good meeting is a skill that few managers have mastered. But in the real world, most ideas get hatched at meetings. Since actions speak louder than words use the following nonverbal messages:

1. If you are in charge sit at the head of the table to signal you are in charge.
2. Stand while others are sitting to signal you have the floor.
3. Ask a team member to run the meeting if you want to signal that you want to share leadership.
4. To signal you are with the team, sit on one side of the table.

Running effective meetings will put the enthusiasm back in your team, reduce costs due to wasted time, and ensure commitment.

Worlds apart on the dream thing
According to a recent U.S. national survey, one-third of all Americans no longer believe in the American Dream. It seems that some have lost faith because they worked hard all their lives only to find themselves unfulfilled. Others question the very dream itself, arguing that its underlying tenets have become less relevant in an increasingly interconnected and interdependent world.

Jeremy Rifkin, founder and president of the Washington-based Foundation on Economic Trends and author of The European Dream believes a new European Dream, is beginning to capture the world's imagination. Twenty-five nations have joined together to create a United European Dream which adopts a new global consciousness and extends beyond, and below, the borders of their nations. While the American Dream puts an emphasis on economic growth, personal wealth and independence, the new European Dream focuses more on sustainable development, quality of life and interdependence. The American dream depends on assimilation. The European Dream is based on preserving one's cultural identity in a multicultural world.

Canada finds itself caught between these two superpowers. On one hand Canadians have deeply felt values more closely attuned to the emerging European Dream but as a closely attached neighbor to the U.S., Canadians have bought into the free-trade agreement which mimics the American Dream in many ways. While Jeremy Rifkin believes Canadians are in the midst of a transatlantic debate: the American Dream of individual fulfillment versus the European Dream of community it is easy to see the effects of both on our labor forces. The average paid vacation in Europe is now six weeks a year versus only two weeks in America and Canada. If you take into consideration that workers continue to show their disillusionment with their employers with absenteeism, high employee turnover and lack of loyalty, a new European Dream just might be what the world is willing to embrace.

Productivity dilemma
The Conference Board of Canada has reduced Canada's economic standing to sixth place from third a year earlier. The ranking is based on a survey of 24 countries belonging to the Organization for Economic Co-operation and Development. The United States rose to first place from sixth place primarily due to productivity gains with Iceland in second place. Nearly 80 per cent of foreign executives interviewed for the Conference Board's report complained about the work ethic of Canadian workers and described the country as an "average" place in which to invest. Canadian labor forces productivity, motivation and ability to meet deadlines was described a "poor." More than 50 per cent of those interviewed were critical of the productivity and quality of work of Canadian suppliers, a perception that the study said "constitutes a big disadvantage to attracting foreign direct investment." While U.S. productivity is expected to slow the Wall Street Journal indicated that the third quarter of 2004 marked the 14th straight quarter increase in productivity.

If you would like an objective analysis of your company's productivity level or want to discuss what American companies are doing that Canadian companies are not, contact us at www.llhenterprises.com.

Online Banking Grows
A new study by comScore Media Metrix Canada finds that online banking continues to be a growing industry. Historically, Canadian households have done more online banking than US households, and this pattern will continue for 2004. It is estimated that 43.7% of US online households will engage in online banking in 2004, a rate already well below that of Canadian online households in 2003.

This many be a real opportunity for U.S. banks to reduce costs by building their online banking services.

Crude prices
If you think $50 (U.S.) a barrel is an absurd price for a barrel of oil be glad your car doesn't run on orange juice. Current prices are soaring not just making travel, heating and air conditioning expensive but anything liquid in our refrigerators is out of control, according to Report on Business magazine. Compare the following:

Litre of Gasoline: 81.1 cents
Litre of Milk : $2.29
Litre of Orange Juice: $2.95
Lite of Crude Oil: 39.58 cents

Good news, bad news
The value of building permits took an unexpected tumble in September in Canada, falling 3.3 per cent from August to $4.4 billion, Statistics Canada reported. This marks the first time in seven years that numbers have dropped for three consecutive months but building permits are still 4.3 per cent higher than the monthly average in 2003. Canada did add 34,300 jobs in October compared to 337,000 in the United States. However, the U.S. construction industry accounted for 71,000 of the jobs due to hurricane clean up. Of concern to Canada, the United States and Europe is currency in all three countries. The Canadian dollar continues to rise to the highest in 12 years, closing at 83.5 cents U.S. (Nov. 5th). At the same time the euro closed at a new high of $1.2962 (U.S.) while the U.S. dollar fell to an all-time low. As a result, there is talk that the Bank of Canada might increase interest rates in the weeks ahead, the Federal Reserve is going to raise its interest rates and in Europe there is fear that the stronger euro will dampen economic recovery due to a slowdown in exports, although there are differing concerns amongst the European Union.

Which Wireless Service Providers Provide Best Service?
In-Stat/MDR surveyed customers of the major US mobile phone providers to see which companies are tops in customer satisfaction. Verizon Wireless and T-Mobile subscribers gave those companies the highest marks for customer satisfaction, with the latter improving enough since last year to knock Nextel down from a top spot. Although its service wasn't rated as high as Verizon or T-Mobile, Sprint had the longest average customer tenure, while T-Mobile had the shortest. In-Stat conducted a similar study in March 2004, at which time Nextel was rated highest in customer satisfaction.

Some general trends emerged regarding the strengths and weaknesses of both the providers' customer service and their actual mobile phone service. Overall, customers gave carriers high marks on having easy-to-read bills and helpful and courteous staff. Customer service complaints were scarce - some respondents felt their providers did not have any specific customer service weaknesses, while others were unable to name one. The biggest complaint cited was poor in-store customer service. Overall T-Mobile and Verizon received the highest ratings for customer service.
In terms of actual cell service, good coverage was the most frequently mentioned strength among all carriers, while poor in-house reception and dropped calls were oft-cited complaints. Verizon Wireless was rated highest in the cell service quality category. Service quality is more important than ever, since customers have become more willing to switch providers. In-Stat found that 19.8% of respondents said they "definitely will" or "probably will" switch providers in the next 12 months, compared to 14.5% in July 2003. The ability to transfer phone numbers when switching providers ("number portability") is obviously a major factor in this change.

The essence of good marketing is to help a business stand out in a crowded market place. Not very long ago, few Canadians had heard of an obtusely named retailer named RONA. But in the past 18 months Rona has spent $90 million on marketing and has gone from a small Quebec retailer to entering into the English-Canadian market and taking on Home Depot. Rona has more than doubled its share of the $30-billion Canadian hardware and home renovation market-to about 14%, with 2003 retail sales of $3.9 billion and it's nipping at the heals of Home Depot for the top spot, according to the Toronto Globe and Mail newspaper.

It's not luck but rather Rona's unique business model that has driven its success. It is publicly traded; has an array of big box, medium-sized and small neighbourhood stores; and a mixed corporate and dealer ownership which gives it a little edge over the competition. "By operating stores in a variety of formats, Rona can enter any market with whatever size of store is appropriate," says Michael McLarney, editor of the Toronto-based industry newsletter Hardlines." The most appealing aspect of Rona's right-sizing of stores, analysts say, is that it enables the company to invest just the right amount of capital in a given situation to earn a good return. Signing up an independent hardware store in a small town takes less of an investment on Rona's part than opening a corporate-owned store there.

Rona started out in 1939 as a loose coalition of Quebec hardware merchants who united their purchasing power to get better prices on goods. In the early 1960's the group became a dealer-owned coop. It changed its name to Ro-Na, a moniker derived from the first names of the group's presidents, Ronland Dansereau, and his deputy, Napoleon Piotte but the hyphen was dropped in 1998, when the corporate name became RONA Inc.

Current President and CEO Robert Dutton joined Rona in 1977 and was assigned the task of making Rona a brand name. By the time Dutton was appointed executive vice-president and chief operating officer in 1990 (when he was only 39) he had achieved his goal of making Rona Quebec's best-know hardware brand. However, his next goal of transitioning the company into a revolutionary new era in retailing will be more of a challenge.

In 1992 North American retailing was seeing warehouse stores popping up and by 1994 the big box concept was in Canada producing a characteristic of a ceaseless need to grow. For Rona growing meant moving into English-Canada but to do that Dutton needed to retool the big-box concept to be competitive. The first stage of his strategy was to make stores less daunting and dingy-in short, more "woman-friendly," as Dutton puts it. At the same time he is adding something that many Canadian customers complain they still can't find in the big-box concept-customer service. Since big box stores can range from 85,0000 square feet to nearly double the size, Rona has chosen a different route with its smaller mini-box. The mini-box is 41,000 square feet of retail indoor space and, attached to it, a 20,000 square-foot fully enclosed drive-through where building materials are sold and loaded. That keeps the unsightly stuff out of view and better services contractors. The stores' main retail area is bright and clean, with high white ceilings and wall and polished floors. Service-oriented "boutiques"-specializing in paint, home-décor accessories, windows, mouldings, flooring and lighting--form the outer ring of the store.

As Rona moves forward to reach its target of 25% of the market by 2007, each point of market share is sure to become more difficult to get. While Canada is still dominated by small chains and independents, it will take converting scores, or even hundreds of these outfits to the Rona banner to bring them closer to his goal. Qualifying and courting hundreds of individual dealers is a tough slog. Only 10% of the company's sales are driven by housing starts so the renovation market is crucial to Rona's success. The aging baby boomers who fuel this market have time and money and about 65% of Canada's homes are more than 20 years old.

What does this mean to you?
One of the lessons to be learned from Rona is that strategy has driven and hopefully will continue to drive their success. Rona like most companies has gone through many changes from its humble beginnings and their strategy has been tweaked to fit the current marketplace.

Perhaps the most important lesson is that if you think outside the box you can come up with a different way to deliver your goods and services. Rona's business model is a good example of innovation that can propel a company to success. Of course it also means knowing your company inside out, knowing your customers and what they want, and being realistic in appraising your company's capacities.

The following publications have sought Linda's expertise over the past two months:

ADL newsletter published Linda's article on Communication a Hot Issue.
NPCA magazine quoted Linda in an article on Mastering the RFP Process.

If you would like Linda to write an article for your in-house publication, email lhanson@llhenterprises.com.

Please give us feedback on this issue of The Superior Performance Report (click here) and let us hear your insights and what you would like to hear about next time.