Oklahoma City National Memorial

ron palinkas ron palinkas ron palinkasThe Oklahoma City bombing was a domestic terrorist truck bombing on the Alfred P. Murrah Federal Building in downtown Oklahoma City, Oklahoma, the United States on April 19, 1995. Perpetrated by Timothy McVeigh and Terry Nichols, the bombing killed 168 people, injured more than 680 others, and destroyed one-third of the building. The blast destroyed or damaged 324 other buildings within a 16-block radius, shattered glass in 258 nearby buildings, and destroyed or burned 86 cars, causing an estimated $652 million worth of damage. Extensive rescue efforts were undertaken by local, state, federal, and worldwide agencies in the wake of the bombing, and substantial donations were received from across the country. The Federal Emergency Management Agency (FEMA) activated eleven of its Urban Search and Rescue Task Forces, consisting of 665 rescue workers who assisted in rescue and recovery operations. The Oklahoma City bombing was the deadliest terrorist attack on American soil until the September 11 attacks six years later, and it still remains the deadliest incident of domestic terrorism in United States history.

ron palinkas ron palinkasWithin 90 minutes of the explosion, McVeigh was stopped by Oklahoma Highway Patrolman Charlie Hanger for driving without a license plate and arrested for illegal weapons possession. Forensic evidence quickly linked McVeigh and Nichols to the attack; Nichols was arrested, and within days, both were charged. Michael and Lori Fortier were later identified as accomplices. McVeigh, a veteran of the Gulf War and a U.S. militia movement sympathizer, had detonated a Ryder rental truck full of explosives parked in front of the building. His co-conspirator, Nichols, had assisted with the bomb’s preparation. Motivated by his dislike for the U.S. federal government and angry about its handling of the Ruby Ridge incident in 1992 and the Waco siege in 1993, McVeigh timed his attack to coincide with the second anniversary of the deadly fire that ended the siege at the Branch Davidian compound in Waco, Texas.

The official investigation, known as “OKBOMB”, saw FBI agents conduct 28,000 interviews, amass 3.5 short tons (3,200 kg) of evidence, and collect nearly one billion pieces of information. The bombers were tried and convicted in 1997. McVeigh was executed by lethal injection on June 11, 2001, and Nichols was sentenced to life in prison in 2004. Michael and Lori Fortier testified against McVeigh and Nichols; Michael was sentenced to 12 years in prison for failing to warn the United States government, and Lori received immunity from prosecution in exchange for her testimony.

ron palinkas ron palinkasAs a result of the bombing, the U.S. Congress passed the Antiterrorism and Effective Death Penalty Act of 1996, which tightened the standards for habeas corpus in the United States, as well as legislation designed to increase the protection around federal buildings to deter future terrorist attacks. On April 19, 2000, the Oklahoma City National Memorial was dedicated on the site of the Murrah Federal Building, commemorating the victims of the bombing. Annual remembrance services are held at the same time of day as the explosion occurred.

Manage Like A Pirate

Be a pirate manager ron palinkas ron palinkas

As a little boy, I loved pirates. We often lived near the ocean and I had a number of pirate books, which I still have, that sparked my imagination. I was smitten by Disney’s Peter Pan and enjoyed recently the pure entertainment of the Pirates of the Caribbean series. But, honestly, I never thought I could learn a lesson or two about leadership and management from these lawless reprobates.

17th Century Sea Bandits. Peter Leeson in his wonderful paper An-arrgh-chy: The Law and Economics of Pirate Organization teach us how 17th-century pirates, or sea bandits as they were called in the day, managed their ships. It helps to remember that the only way we communicated and traded with the rest of the world in those days was by ship. Most of the ships on the seas were merchant, explorer, naval, pirate, or privateer ships. And with the exception of some explorer ships, only the pirate ship was managed in a cooperative way that benefited the whole crew. Most merchant ships were ruled by captains, whose primary job was to maximize the profit for the absentee ship owners, like some businesses today. These captains were usually incented to maximize profit and, therefore, sometimes abused and cheated their crews.

Pirate Ship Industry. The golden age of piracy started in the late 1600’s and peaked between 1716 and 1722 when pirates really ruled the seas and maritime Admiralty Laws rarely controlled them. Leeson reports that 60 percent of the pirates were born in either England or America and 20 percent in the West Indies. Some pirates came from jobs on merchant ships where they had been abused by their captains.   The actual number of pirates in the industry is hard to measure, but some “expeditions” had as many as 2,000 pirates, so they were a force to be reckoned with. The average ship crew size was between 80 and 120 and Blackbeard’s crew on Queen Anne’s Revenge had 300. Pirates like Bartholomew had a squadron of 4 ships with 500 men. Arguably the largest pirate organization was Captain Morgan, who commanded 37 ships and 2,000 men at his peak. He terrorized the Spanish Main, which was all the land surrounding the Caribbean Sea and the Gulf of Mexico. Recently, five of Captain Morgan’s ships were discovered on a reef off the coast of Panama.  Against these kinds of ships and hoodlums, I can’t imagine how a merchant ship with only about 13-17 crew members or a small Royal Navy ship with a crew of 150 had much chance.

The Pirate Management Structure – Quartermasters and Captains. Had you asked me before I read Leeson’s article how I thought pirate ships were organized, I would have thought they were led by tough, mean captains who drove their crews hard with an autocratic and cruel hand. While I’m sure that did happen, we now know those captains didn’t last long – their crews captured and sometimes killed them. At the very least the captain was beaten and set adrift with his supporters in a small boat, often never seen again.  Since pirates captured their ships, they owned them. There were no absentee-owners to satisfy. They were, as one historian described them, a “sea-going stock company.” And captains had to align their leadership with the crew’s goals, or they would be replaced. What evolved in successful pirate enterprises was a management structure with two leaders – the captain and the quartermaster, both elected by the crews

The Quartermaster. Quartermasters were the leaders the Pirates “trusted” most. This was the position that was really in charge whenever the ships weren’t in battle. Quartermasters fairly allocated provisions, selected (no room for all the loot) and distributed the loot, settled/adjudicated crew member disputes, and administered punishments. According to written records noted in Leeson’s article, “the Captain can undertake nothing which the Quarter-Master does not approve…he speaks for, and looks after the Interest of the Crew.

The Captain. Captains were responsible for planning and executing attacks on merchant ships and other battles. They were usually paid more than the crew, but often slept in the same areas as the crew and had the same provisions assigned to them.

The Constitution or Articles of Agreement. To control quartermasters, captains, and all crew behavior, pirates often had constitutions or “articles of agreement”. In addition to behavioral restrictions (no fighting, women, or gambling on board the ship) these agreements also described how booty would be shared and reinforced the pirate’s mantra of “no prey, no pay.”

Booty Splits. All captured booty was collected by the quartermaster and no crew members could keep anything for themselves or they faced brutal punishments. Injured crew members received generous payments before any booty was split, this was the workers’ compensation of the pirate era. A few key skill positions – advance scouts, carpenters, surgeons, captains, quartermasters – received payments and shares greater than the other crew members. Otherwise, all the booty was split evenly as prescribed in the Articles of Agreement.

How much did a pirate make? In one 1696 example, Henry Every’s pirates captured a fleet carrying a value of 600,000 pounds sterling in precious metals. Each pirate on this crew collected a share of 1,000 pounds, equivalent to more than 40 years of earnings for a merchant seaman who earned on average 12 pounds sterling per year. So, if you can live with the brutality of being a pirate – you had to rob, murder, and torture innocent sailors – as well as face certain hanging if caught, then a pirate’s life was definitely lucrative.

The Leadership and Management Lessons. I don’t mean to put pirates up on a pedestal, they were (and are) bad guys. However, I did take away three leadership/management lessons from reading this piece that provides the building blocks for any successful organization.

  1. Pirates understood they needed men with different talents to fulfill two, significant leadership roles – the captain and the quartermaster. One role was needed to make money and the other to manage the business. They knew the captain would be doing what Hayagreeva Rao refers to as “star tasks” and the quartermaster would be doing “guardian tasks.” Star tasks include strategic work like target identification, commanding during battle, and negotiating agreements with other pirates to form alliances or fix jurisdictions. Guardian tasks are more operational and include allocating arms, scheduling work routines, managing internal conflicts and administering discipline, distributing loot, and taking care of the injured.
  2. The pirates knew they needed a control system to assure success and protect themselves from themselves. Perhaps there can be honor among thieves if they agree to a code of operation.
  3. Common mission and goals will hold a group together as long as the system that supports them are fair.

This shows us how almost any group can build a successful organization if they figure out how to position these three building blocks. While it is sad today to see terrorists trying to build this same kind of organizations, it is encouraging to see that when all civilized nations work together we can splinter and collapse them – just like nations did to the pirates in the 18th century.


http://managementtechniquesfrom17th century pirates by Steve Wood (Steve Wood)

Staff Sergeant Clinton L. Romesha

On October 3, 2009, according to a report published by U.S. Army historian Richard S. Lowry, Taliban fighters launched a coordinated attack on the outpost from three sides at about 06:00,[3] capturing its ammunition depot.[5] Some 300 fighters participated in the attack armed with a recoilless rifle, rocket-propelled grenades, mortars, machine guns, and small arms, badly outnumbering the International Security Assistance Force (ISAF) presence of about 85 U.S. Army, Afghan National Army and Latvian Army soldiers, and the 35 Afghan soldiers who abandoned their positions.[8] It would later be known as the Battle of Kamdesh.[6]

During the first three hours of the fight, the U.S. troops remained under intense mortar and small arms fire, before the Taliban fighters breached the compound and set fire to it. Romesha moved under heavy fire to reconnoiter the area and seek reinforcements from a nearby barracks, helping the ISAF forces to regroup and fight despite being targeted by a Taliban sniper.[8] Romesha led the firefight to reclaim the depot, organizing a five-man team to counterattack while still under fire. He then neutralized one of the Taliban fighters’ machine gun teams. While engaging a second, he took cover behind a generator which was struck by a rocket-propelled grenade,[6] and Romesha was wounded in the neck, shoulder, and arms by shrapnel.[9] Despite being wounded, Romesha directed air support that killed an estimated 30 Taliban and then took out several more Taliban positions himself. He provided suppressive fire to allow three other wounded American soldiers to reach an aid station and then recovered several American casualties while still under fire. Romesha’s efforts allowed the troop to regroup and fight off a force superior in numbers.[6] The fight lasted 12 hours, and eight American soldiers were killed,[5] making the engagement one of the costliest for ISAF forces during the war.[8] Nine soldiers were decorated with Silver Star Medals for the fight.[8] Several days later, the ISAF forces withdrew from the post.[10]

Citation:  Staff Sergeant Clinton L. Romesha distinguished himself by acts of gallantry and intrepidity at the risk of his life above and beyond the call of duty while serving as a Section Leader with Bravo Troop, 3d Squadron, 61st Cavalry Regiment, 4th Brigade Combat Team, 4th Infantry Division, during combat operations against an armed enemy at Combat Outpost Keating, Kamdesh District, Nuristan Province, Afghanistan on October 3, 2009. On that morning, Staff Sergeant Romesha and his comrades awakened to an attack by an estimated 300 enemy fighters occupying the high ground on all four sides of the complex, employing concentrated fire from recoilless rifles, rocket propelled grenades, anti-aircraft machine guns, mortars and small arms fire. Staff Sergeant Romesha moved uncovered under intense enemy fire to conduct a reconnaissance of the battlefield and seek reinforcements from the barracks before returning to action with the support of an assistant gunner. Staff Sergeant Romesha took out an enemy machine gun team and, while engaging a second, the generator he was using for cover was struck by a rocket-propelled grenade, inflicting him with shrapnel wounds. Undeterred by his injuries, Staff Sergeant Romesha continued to fight and upon the arrival of another soldier to aid him and the assistant gunner, he again rushed through the exposed avenue to assemble additional soldiers. Staff Sergeant Romesha then mobilized a five-man team and returned to the fight equipped with a sniper rifle. With complete disregard for his own safety, Staff Sergeant Romesha continually exposed himself to heavy enemy fire, as he moved confidently about the battlefield engaging and destroying multiple enemy targets, including three Taliban fighters who had breached the combat outpost’s perimeter. While orchestrating a successful plan to secure and reinforce key points of the battlefield, Staff Sergeant Romesha maintained radio communication with the tactical operations center. As the enemy forces attacked with even greater ferocity, unleashing a barrage of rocket-propelled grenades and recoilless rifle rounds, Staff Sergeant Romesha identified the point of attack and directed air support to destroy over 30 enemy fighters. After receiving reports that seriously injured Soldiers were at a distant battle position, Staff Sergeant Romesha and his team provided covering fire to allow the injured Soldiers to safely reach the aid station. Upon receipt of orders to proceed to the next objective, his team pushed forward 100 meters under overwhelming enemy fire to recover and prevent the enemy fighters from taking the bodies of their fallen comrades. Staff Sergeant Romesha’s heroic actions throughout the day-long battle were critical in suppressing an enemy that had far greater numbers. His extraordinary efforts gave Bravo Troop the opportunity to regroup, reorganize and prepare for the counterattack that allowed the Troop to account for its personnel and secure Combat Outpost Keating. Staff Sergeant Romesha’s discipline and extraordinary heroism above and beyond the call of duty reflect great credit upon himself, Bravo Troop, 3d Squadron, 61st Cavalry Regiment, 4th Brigade Combat Team, 4th Infantry Division and the United States Army.[22]

Bristol, TN and The Baldridge Award

Bristol Tennessee Essential Services is an electricity and fiber services utility company that serves 33,000 customers with only 68 employees. It offers the fastest internet available in the United States at 10 Gigabits per second, has implemented efficiencies that saved its customers approximately $70 million over the last 40 years, and has customer satisfaction levels approaching 100 percent on many products and performance measures.


  • Reliability is a key performance measure and a key success factor for BTES. With new technologies and innovations, BTES continues to decrease outage minutes with a strenuous goal of fewer than 60 minutes per customer per year, which it has exceeded for the past three years. This benchmark far outperforms the industry, regional, and best-in-class averages (all 90-100 minutes). With the use of its innovative Automated Switching System, BTES saved its customers an additional 46 minutes per customer of outage time in 2016.
  • Results for the Average Service Availability Index (ASAI), a key measure of BTES’s preparedness, have outperformed all utility, region, and class comparisons, achieving a rate of 99.99 percent from 2014 through 2016.
  • BTES has continuously saved money for its customers, enabling them to keep approximately $70 million in their pockets over the last 40 years. The organization considers this measure a key financial success factor.
  • The company’s employee retention rate has increased to 100 percent, while the industry benchmark is 91 percent and the national industry average is 82 percent.

Operational Excellence

  • Service reliability, as measured by reducing electrical outages and by the national System Average Interruption Duration Index (SAIDI)—or the total number of minutes in which a customer’s service is interrupted divided by the total number of customers served by the utility company over the same period of time—has continuously improved and has outperformed the annual goal of less than 60 minutes, far outperforming industry, regional, and best-in-class averages (all 90–100 minutes).
  • BTES has not had a lost workday in over a year, and over the last 35 years, only two safety-related incidents have resulted in lost work days for the company.
  • BTES works to prevent outages through several preventative actions, and a database with causes of outages is maintained and discussed by employees at daily and weekly outage meetings. The company’s results for the Average Service Availability Index (ASAI), a key measure of BTES’s preparedness, have outperformed all utility, region, and class comparisons, achieving a rate of 99.99 percent from 2014 through 2016.
  • BTES’s operating and maintenance expenses have consistently remained below those of other area power companies and other comparable sources. During the timeframe of 2012–2016, BTES operating and maintenance expenses per customer were favorably lower than other Tennessee Valley Authority (TVA) local power companies and all municipal average comparisons.

Customer Satisfaction and Engagement

  • Due to efficiencies such as integration of the fiber optic system, energy-efficient home improvement loans, training at in-house seminars and trade shows, energy-efficient lighting and equipment, and continuous cost evaluation and control, BTES has saved money for its customers, enabling them to keep approximately $70 million in their pockets over the last 40 years. BTES considers its ability “to maintain the amount of money in customers’ pockets” to be a key financial success factor.
  • To measure customer satisfaction, BTES uses the Customer Average Interruption Duration Index (CAIDI) data maintained by the American Public Power Association. From 2013 through 2016, BTES’s results for this index exceeded all utility, region, and class comparisons. Customer satisfaction levels with all BTES product lines (especially Internet, television, and electricity products) as well as customer service, the help desk, average outage time per customer, Internet performance, and cable television have been sustained over many years, with many levels approaching 100 percent and exceeding competitor, industry benchmarks, and best-in-class comparison levels.
  • All customer feedback, both positive and negative, is tracked and reviewed weekly by the company, with all senior leaders involved, during the formal Continuous Improvement Team meeting. The feedback is analyzed for potential gaps, trends, and improvement opportunities. Improvement opportunities are identified, root causes are determined, and actions are taken to address customer concerns.

A Valued Workforce

  • Employee engagement is measured through performance appraisals, retention, and attendance. The percentage of employees with perfect attendance is about 75 percent, far exceeding the industry average of just under 20 percent. Employee retention has increased to 100 percent, while the industry benchmark is 91 percent and the national industry average is 82 percent.
  • Striving to provide the “best place to work” in the region, BTES demonstrates a commitment to building an effective workforce environment and to engaging and empowering the workforce. For example, BTES provides on-site exercise equipment for employees and retirees, access to information on healthy lifestyles and well-being, flu shots, and educational and advancement opportunities. BTES’s commercial-grade kitchen, which is brought online during extended area power outages and inclement weather, enables its support staff and leadership to produce meals for crews who are engaged in restoring power, further reducing the outage time experienced by customers.
  • BTES uses its SMART (System Management and Resource Training) system, an online training portal, to communicate process standards, standard operating procedures, and process changes and improvements. Employees are expected to complete all assigned modules every quarter, and 100 percent of BTES’s workforce annually participates in workforce development opportunities.

Leadership Fostering a Culture for Success

  • BTES’s family-oriented management team has shared accountability and is consistently focused on the organization’s vision “to be the best electric, Internet, telephone, and cable television provider.” Senior leaders operate with a high level of mutual trust and collectively hold each other accountable for achieving strategic objectives, action plans, and high performance in the organization’s key success factors of safety, reliability, and finance.
  • BTES has built a culture of continuous improvement, which is fully deployed throughout the organization and is effective at identifying and rapidly improving performance. For example, the CAP-DO process (Check, Act, Plan, Do) encourages employees and teams to rapidly improve processes. Through the use of its Improvement Initiative Process (IIP), BTES treats all customer- and employee-related inputs as either an “OFI” (opportunity for improvement) or a “positive,” which provides consistency and rigor in data gathering from all departments and processes throughout the organization.

Superior Financial and Marketplace Results

  • In its service area, BTES holds market shares of 100 percent for electrical services, 75 percent for Internet services, 60 percent for telephone services, and 70 percent for cable services. Those percentages for fiber-related services (Internet, telephone, and cable) have increased relative to the company’s competition.
  • Bad debts have consistently remained under 0.1 percent for BTES, far outperforming the regional average of 0.17 percent.
  • BTES has steadily increased its annual revenue to approximately $112 million and has consistently produced a positive net income for more than 40 years


The Service Industry Meets Six Sigma

ron palinkas lean six sigma
Once used only to improve manufacturing processes, Six Sigma is stepping out. Now companies are using it for everything from reengineering environmental health services to making accounts receivable more efficient. But it doesn’t work for all businesses. Here are four things to consider before unleashing Six Sigma throughout your organization.

But Six Sigma is not just for nuts and bolts anymore. Companies are using it to shape up such nonmanufacturing processes as accounts receivable, sales, and R&D. Dow Chemical, for example, estimates that the application of Six Sigma to environmental health, and safety services have saved the company $130 million in the past two years; other initiatives are under way for corporate R&D, finance, information systems, legal, marketing, public affairs, and human resources processes. Not surprisingly, financial institutions, consumer products companies, and health care firms are all jumping on the Six Sigma bandwagon.Six Sigma was originally developed at Motorola in the 1980s for production processes because of the high volume and the high degree of standardization that define such activities. Its goal is to eliminate waste by achieving near-perfect results (Six Sigma-level quality means no more than 3.4 defects per million). General Electric, AlliedSignal, and other well-known manufacturers credit Six Sigma with billions of dollars in savings.

“But every customer is different,” some bankers, lawyers, and doctors may quickly counter, warning that standardizing processes will result in inferior service.

Their concerns have some merit. Six Sigma won’t work for every service process, and adjustments may be required for it to suit even those processes for which it does apply. Nevertheless, many of the lessons learned from the production lines are relevant to service processes. What’s more, you’d be surprised by how many highly personalized services have standardized component processes—for example, filling out forms or obtaining follow-up information that, when streamlined, can improve the level of service that the customer experiences.

Financial institutions, consumer products companies, and health care firms are all jumping on the Six Sigma bandwagon.
— Jim Biolos

Besides, Six Sigma’s off-the-shop-floor successes are too significant to ignore. The issue is no longer whether Six Sigma should be considered; it’s when and how. Below, some advice about how to adapt Six Sigma methods to service processes.

1. Determine which parts of your service processes are the best candidates.Look at each process that goes into the service you provide and identify it as either highly customized, mass-customized, or standardized.

Highly customized processes, such as complex IT systems implementation, have a high variability of tasks and are used in many different situations. The cost of applying Six Sigma to such processes often exceeds the benefits.

Mass-customized processes are good candidates for Six Sigma campaigns if the volume of activity is high enough or if greater efficiency will result in significant cost savings, as is often the case with, say, media buys.

Standardized services, such as credit card account services or fast-food service, can yield substantial benefits from a Six Sigma campaign. Within a company, accounts payable or payroll and benefits processing services are often the most likely candidates.

Within any given industry sector, highly customized, mass-customized, and standardized processes can exist, each category presenting a different opportunity for applying Six Sigma.

Just look at Web site development. Highly customized Web site developers are likely to achieve benefits from Six Sigma in project administration: client set-up, billing and collection, and, perhaps, in project status reporting. Mass-customized Web developers can apply Six Sigma to hone their core service. Standardized services have the greatest Six Sigma potential because they use software or Web sites to take clients through the entire process. A human gets involved only to answer a question.

2. Define what you mean by a service defect and how you intend to measure it. Keep in mind the advice of the late quality guru W. Edwards Deming, whose management theories are the foundation of Six Sigma: People don’t cause defects, systems do. In other words, employees typically try to do things the right way, but their actions are strongly influenced by the way the system is set up. So a defect is more likely a sign that the system needs reworking than it is an indication that an individual needs reprimanding.

That said, defining a service defect—where there are no products to return, nothing to inspect, and highly variable processes—is one of the most challenging aspects of applying Six Sigma to service-delivery systems. Until you reach agreement on what constitutes a service defect, says Edward Baker, former director of quality at Ford Motor Company and author of Scoring a Whole in One, your Six Sigma effort will likely disappoint.

It is application of the technique that matters.
— Edward Baker,
author of Scoring a Hole in One

When former General Electric Chairman Jack Welch complained that his frontline managers had “their face towards the CEO and their ass towards the customers,” he was emphasizing the core value of Six Sigma: The customer defines quality. Granted employees define quality at each point in the process, but it is the customer who remains the final arbiter of the results. Accordingly, most Six Sigma programs for services define a defect as a flaw in a process that results in a lower level of customer satisfaction or a lost customer. In short, a service defect means your processes are not delivering on your promise to customers.

When Citibank launched its Six Sigma program for banking services in 1996, it defined a defect as any customer rating below the two highest responses on a satisfaction survey. Based on that definition and survey feedback from customers, Citibank identified seven service process defects in its account opening process, its customer statement process, and five other processes.

Three measures stand out for service businesses, primarily because they are easily quantified:

  • Service defections (that is, lost customers). Harvard Business School professor W. Earl Sasser, Jr., and Bain & Company director Frederick F. Reichheld’s seminal article, “Zero Defections: Quality Comes to Services” (Harvard Business Review, September-October 1990), showed how defects in service quality lead to lost customers. Simply meeting customer expectations was not enough, the authors concluded—customers who aren’t completely satisfied are likely to switch to another service provider. Of course, not all lost customers are the result of a service defect, but this measure serves as a good proxy for defects.
  • Customer satisfaction ratings. In another article, “Putting the Service-Profit Chain to Work” (Harvard Business Review, March-April 1994), Sasser and his coauthors pioneered the notion that customer satisfaction drives loyalty and long-term profitability. When you can articulate and measure how your customers define value—and build your internal processes around delivering that value—the result is often greater customer loyalty and longer-term company profitability. In addition to counting how many customers you lose, you should also measure where your service fails to meet or exceed customer expectations.
  • Service turnaround times. Citibank identified a global standard of service for its account opening process. Most banks opened new customer accounts within three days of receiving the customer application. Analyzing its own processes, Citibank found it took, on average, six days to open a new customer account.

Measuring defects requires skilled researchers and service representatives who can pose the right questions and glean meaningful responses from customers. It’s easy to tabulate customers’ “very satisfied” and “satisfied” responses on a survey form, but it’s much more difficult to get a feel for the highly variable standards they use or to fully understand the cause of their dissatisfaction. So building a certain amount of flexibility into the measurement systems makes sense, as GE learned when it used Six Sigma to streamline its corporate legal services.

How precisely can you measure the cost of the time a GE line executive spends with company attorneys on the preparation of a lawsuit? How well can you calculate what it should have been? Because of the difficulty of quantifying expected results and actual outcomes, GE realized that it couldn’t rely solely on hard numbers to evaluate its Six Sigma program’s success.

3. Probe relentlessly for root causes. Once you’ve identified and measured specific service defects, the one question you must keep asking over and over is “Why is that?” This question embodies the search for the underlying reasons for customer dissatisfaction and/or defection. Typically, there isn’t one single reason; in fact, you’ll often find a half-dozen or more root causes that all contribute to the service defect. Once you’ve identified the chief contributors, you can build systems that better serve your customers.

When an insurance company realized that its commission checks to agents were frequently inaccurate, it drilled down further to uncover several root causes of the defect. Among them: complex commission rules, a check-processing staff that wasn’t knowledgeable about them, and confusing procedures for processing checks. Once these root causes had been laid bare, it was easy for the insurer to streamline rules and procedures and improve the training of its check-processing staff.

4. Remember, this is a long-term commitment. Although GE, Motorola, and others boast of training 100,000 employees in Six Sigma, Baker advises managers “not to use as their measure of success how many people have been trained or the levels of belts that have been achieved. It is the application of the techniques that matter.” That application often takes a while to bear fruit, and you can never put the initiative on autopilot. Subir Chowdhury, executive vice president of the American Supplier Institute (Livonia, Michigan, and author of Design for Six Sigma, has found that many Six Sigma efforts fail because the leadership fails to ensure that everybody “gets it” and that the initiative remains a top priority. A successful Six Sigma effort requires relentless communication and reinforcement—well beyond what most leaders assume is enough. Here are a few pointers to help ensure success over the long haul:

  • Scope your projects well. Don’t take on too much at once. Start with processes that are self-contained within a unit or processes that do not rely on a change in another process.
  • Monitor your organizational culture. If your Six Sigma initiative is to maintain its momentum, you have to do a certain amount of “cultural planning,” says George Eckes, a Colorado-based Six Sigma consultant and author of Making Six Sigma Last. Develop specific cultural objectives for your Six Sigma initiative—for example, ensure that management decisions are based on fact instead of anecdote. And it goes without saying that your incentive program has to be aligned with your Six Sigma objectives. “If the system of promotion and compensation encourages individual performance over collaborative work, then any knowledge gained from Six Sigma training will not reap many benefits for the firm,” says Baker.


Jim Biolos is president of Launch Publishing in Riverdale, N.Y.

“Six Sigma Meets the Service Economy,” Harvard Management Update, Vol. 7, No. 11, November 2002

Six Sigma programs have traditionally been prescriptions for quality improvement in manufacturing industries. But today service firms—and service functions within almost every sector—are also using Six Sigma methods to boost performance.

Veteran Deals for Veteran’s Day

ron palinkas ron palinkas ron palinkas

Normally I would try and post my own list, but I found an article that was so exhaustive and complete, I decided to just post the link.  The list includes free meals, free services, and discounts for veterans on Veteran’s Day (Saturday, November 11.)  Try and take advantage of one of these, if only to remember your service to our country as well as your brothers and sisters.   https://www.thebalance.com/veterans-day-free-meals-1357348


The Four Agreements

Specifically, I want to write a book by Don Miguel Ruiz, The Four Agreements: A Practical Guide to Personal Freedom, a Toltec Wisdom Book. A very long title for a very short book (138 5″x7″ pages)! Despite the claim that the ideas in this book represent insights possessed by the Toltecs in what is now Mexico a thousand years ago, most of these ideas are highly similar to concepts used by modern humanistic psychologists, transactional analysts, and cognitive-behavioral psychologists. For example, Ruiz says that all children are born perfectly loving, playful, and genuine. However, parents teach their children what Carl Rogers called conditions of worth–standards of behavior the children must follow to receive love and avoid criticism. Eventually, these standards become internalized into what Eric Berne called a life script–an unconscious set of instructions for living life. According to Ruiz, most of these unconscious beliefs are perfectly arbitrary or downright false. Many of them are irrational and unnecessarily limiting. The key to freedom–pace cognitive therapists such as Albert Ellis and Aaron Beck–is to become aware of our irrational and limiting thoughts so that we can replace them with healthy thoughts. In short, this book could be a primer for cognitive-behavioral therapy.

Ruiz says that children do not know any better than to agree with the adult realities into which they are indoctrinated. Children do not argue with the meanings of words or grammar as they are learning the language. If my parents tell me I am smart and handsome, I believe them. If they tell me I am stupid and ugly, I believe them. Children have no choice but to agree. They are like Plato’s prisoners in the cave, shackled and forced into believing that shadows of artificial objects are real. But as we mature, we can become warriors, breaking free from the shackles of agreements with our implanted, false ideas. We can accept healthier agreements. Ruiz presents four such healthier agreements in his book. Below is a Reader’s Digest version; I have written more extensively on the agreements elsewhere.

1. Be impeccable with your word. In a sense, social constructivists are correct about words creating reality. We act on what we tell ourselves is real. Albert Ellis encouraged us to screen our self-talk for negative, irrational chatter. So, what kinds of words to you use when you describe reality? Do you lie and say hurtful and poisonous things about yourself and others? Not healthy! To be impeccable with your word is to be truthful and to say things that have a positive influence on yourself and others.

2. Don’t take anything personally. The first agreement suggests that we avoid treating others hurtfully. The second agreement provides us with a way of dealing with potentially hurtful treatment from others. Because each person sees the world in a unique way, the way that others treat us says as much about them as it does about us. To not take anything personally is to acknowledge the unique identities of other people. We respect their subjective realities, realizing that their views do not necessarily describe us accurately.

3. Don’t make assumptions. Assuming that you know what other people are thinking or feeling about you is a limiting thought that Aaron Beck called Mind Reading. Obviously, none of us can read minds. When we try to engage in mind reading we will often be wrong, leading to undesirable consequences. The antidote to mind reading is to ask for evidence before concluding what people are thinking.

Do these four agreements actually derive from ancient Toltec wisdom? I will bet that many hard-nosed skeptics would have serious doubts about that. I am a skeptic myself. But to my fellow skeptics, I might mention that Ruiz’s next book, The Fifth Agreement, suggests the following agreement: “Be skeptical but learn to listen.”


Posted by: John A. Johnson Ph.D., Bio

The Service Side of Manufacturing

According to a recent McKinsey Report, service inputs (everything from logistics to advertising) make up an increasing amount of manufacturing activity. In 2012, they determined that in the United States, every dollar of manufacturing output requires 20 cents of services. Today, this is closer to 25 cents on average, and in some manufacturing industries, more than half of all employees work in service roles, such as R&D engineers and office-support staff.

So why do manufacturers and manufacturing organizations continue to focus on the production side of the business?

Anyone who knows manufacturing understands the complex operations, supply chain and cost implications of “leaning” or streamlining your production. Identifying where to outsource. Knowing what to keep in-house. How to keep the cost per part down. It’s crystal clear. But when it comes to the “service” side of the business, everything falls into a big bucket of “sunk costs”. The “cost of doing business” so it’s been coined.

Manufacturing, to effectively compete and grow in today’s economy, needs to examine the service side of their business – from a cost perspective, from a differentiation perspective, and from a revenue perspective. The way to win in our competitive environment isn’t simply through product innovations. The new job of manufacturing is embracing the service aspect of the business.

But why should we care about that? Organizations don’t buy our people, they buy our products, right?

That’s not exactly true. The service part of your business (i.e. people and processes) touch your customers and prospects every day, from sales, marketing, and customer service, to tech support, billing, R&D and logistics. None of these areas are the “meat and potatoes” products you sell, but they are integral to what it means to do business with you – and that can either be good or bad.

The service side of your business isn’t simply administrative paper-pushing. “Service” can be a big differentiator, even in manufacturing. And if you haven’t examined and modernized the service side of your business in many years, you are weakening your ability to compete in today’s market on a variety of fronts:

1) Recruitment – How can you effectively recruit and retain top talent, when your organization is working with outdated systems and processes? If you’re still using 20-year old custom software platforms to run your business, it shows that “we do it the way we’ve always done it” and aren’t open to change. If you’re seeking new talent to help grow your business and innovate, this lack of forward-progress sends the message that you are stuck in the stone age and there’s not much of a future in sight.

2) Culture – Do you have people in your organization that hold certain processes, systems, and information hostage? Many companies that haven’t advanced the service side of their business are tied to individuals who are “the only ones that know how to use this system” or “have tribal knowledge” which they hold under lock and key. Because the service side of the company has not lived through continual change and advancement, these folks build their value by holding tightly to aspects of the business that secure their role, but hold back or even stunt growth.

3) Profitability – Are your service side operations complex, slow, and highly manual? Does it take a dozen people to create a report or process an order? If you’re not leveraging software and systems to simplify these operations, as your company grows, so will your overhead. The ability to do more with less, and allowing people to expand their skill sets not only reduces expenses but helps you function more efficiently. Using new technology can also provide insights on sales opportunities and cost reduction areas never before seen.

4) Customer Engagement – Is it hard to do business with you? Does a customer have to call and talk with 4 or 5 people before an issue is resolved? Or always have to send an email when they need a copy of an invoice? Customer engagement is about the customer. Using platforms and tools can make their experience working with you simpler and easier, in addition to helping them reduce their own cost of doing business. Modernizing your operations provides more information transparency to your customer, and the opportunity to create new service avenues, such as virtual customer service and auto-reordering of wear parts, to name a few.

5) Brand – You might have the “best quality” products on the market, but if your service operations are outdated, it reflects on your organization as a whole. Are you still sending invoices by fax? What message does that send to a purchasing agent? If you can’t do business communications and engagements through modern means, there will be little confidence that your products will be any less outdated, both in design and production processes, limiting long-term growth and brand perception in the marketplace.

6) Competitive Advantage – Since many mid-market manufacturers don’t spend much time on the service side of the business, this can be a huge competitive advantage to those that do. Are you in a highly-competitive market but struggle to differentiate your product? Then differentiate through service. Use the service side to give customers and prospects insights about where their order is in production, instead of the industry standard “2-4 week delivery” line. Integrate with their purchasing systems to free up administrative time on your end and theirs. These types of differentiators are also typically difficult and time consuming for your competition to replicate.

Manufacturing is not about simply making widgets – manufacturing is a business. Every aspect of your business needs to advance and grow as markets change, customers change, and competitors change. Focusing only on production leaves out half of your operation to stagnate and drag the rest down with it.

About the Author:

Andrea’s 19-year, field-tested background provides unique, applicable approaches to creating leaner, more effective, technology-driven, industrial organizations. A 4-time ADDY® award-winner, she began her career at a tech start-up and led the strategic marketing efforts at two global industrial manufacturers.

In addition to writing, consulting and coaching, Andrea speaks to leaders and industry organizations around the world on how to craft an effective customer-facing operational strategies to discover new sources of revenues and savings. Connect with Andrea to access information on her book, workshops, keynote speeches, training or consulting. More information is also available on www.pragmadik.com and www.nodisruptions.com.

Pick up a copy of her new book, “No Disruptions: The New Future for Mid-Market Manufacturing”, available on Amazon.com in Paperback or Kindle.


4 Types of Organizational Behavior

The first 100 days are usually the honeymoon period for any new CEO to make their mark and get others on board. However, for Airbus CEO Christian Streiff, it was just a brief window before his abrupt departure from the European aircraft company that’s part of the EADS consortium, along with DaimlerChrysler and Aerospatiale-Matra.

Streiff’s drive to speed up decision-making, overcome bureaucracy, and deliver rapid execution, exposed historic and deep divisions between executives at the consortium. There were reports of internecine feuding at Airbus: The internal atmosphere was tense; jobs were allocated by preferences other than commercial criteria, and mistakes such as insufficient cabling were a result of internal conflicts and mistrust. Even Streiff ended up concluding that it was the political nature of Airbus that prevented it from becoming an integrated company. In short, he became the unintended victim trapped by what the Financial Times called “byzantine organizational politics.”

Dysfunctional politics can sink an organization, and yet most of the executives I teach react with distaste to the idea of being a savvy organizational politician. Yes, it can be self-serving. However, the reality is that politics is normal. According to McGill’s Henry Mintzberg, it’s just another influencing process along with norms, formal authority and expertise. Thus it’s important for leaders to understand the forms it can take and how to use it for the well-being of the organization.

Defining politics

While we would be naive if we didn’t acknowledge politics as a potentially destructive force, when deployed effectively it can help the company meet its strategic goals and live up to its values, especially during organizational change.

So what is it? Organizational politics refers to a variety of activities associated with the use of influence tactics to improve personal or organizational interests. Studies show that individuals with political skills tend to do better in gaining more personal power as well as managing stress and job demands, than their politically naive counterparts. They also have a greater impact on organizational outcomes.

However, political behavior is also likely to be present, but not explicit, until it is too late. For example, it may be the case that a manager needs to exert a large amount of pressure on a team to get something done by using the power of their position over others. It is also occasionally necessary for employees to work behind the scenes to build coalitions of believers in a new vision to convince others. Whatever the situation, it is important to understand that the root cause of political activities is often scarce resources (including time pressures), social and structural inequalities, and individual personal motivations.

Executives can view political moves as dirty and will try to distance themselves from those activities. However, what they find hard to acknowledge is that such activities can be for the welfare of the organization and its members. Thus, the first step to feeling comfortable with politics requires that executives are equipped with a reliable map of the political landscape and an understanding of the sources of political capital.

Mapping the political terrain

To address these challenges, we need to chart the political terrain, which includes four metaphoric domains: the weeds, the rocks, the high ground, and the woods. Each has different rules for skillful navigation.

Navigating these domains requires awareness of two important dimensions. First is the level that political activity takes place. Political dynamics start with the individual player and their political skills. These can evolve into group-level behaviors. At the other end of this dimension is the broader context, where politics operates at the organizational level.

The second dimension of the political landscape is the extent to which the source of power is soft (informal) or hard (formal). Soft power is implicit, making use of influence, relationships, and norms. Political activity based on “hard,” formal, or explicit power draws upon role authority, expertise, directives, and reward/control mechanisms.

These two dimensions of power can provide us with the tools to navigate the four metaphoric domains.

The Weeds

In this quadrant, personal influence and informal networks rule. I call it “the weeds” because it’s a dynamic that grows naturally, without any maintenance. It can be a good thing. For example, at one not-for-profit organization, the Secretary-General was seriously underperforming, and sometimes acting unethically, leading staff to worry that they’d lose the support of key donors and government officials. As a result, an informal group regularly met to cover up his mishandling of situations. However, the problem became unsustainable and the same group, within the year, helped to ease him out to protect the organization’s reputation. Thus, the development of an informal coalition saved the organization and political activities, in this case, were a force for good.

But “the weeds,” if left unchecked, can also form a dense mat through which nothing else can grow. In these circumstances, informal networks can be a countervailing force to legitimate power and the long-term interests of the organization. For instance, they can thwart legitimate change efforts that are needed to put the organization on a sounder long-term financial footing.

To deal with the weeds, get involved enough to understand the informal networks at play. Identify the key brokers, as well as the gaps — if you can fill the gaps — or ally with the brokers so that you can increase your own influence. Conversely, if the brokers are doing more harm than good, you can try to isolate them by developing a counter-narrative and strengthening connections with other networks.

The Rocks

Power in “the rocks” rests on individual interactions and formal (or “hard”) sources of authority such as title, role, expertise, or access to resources. It might also include political capital that arises from membership of our strong ties to a high-status group such as the finance committee, a special task force, or the senior management team. I call this the “the rocks” because rocks can symbolize a stabilizing foundation that keeps an organization steady in times of crisis. But conversely, the sharp edges of hard power can wreck a plan.

Consider a mid-sized advertising agency that was implementing a new growth strategy. The Chairman used his formal power to stop the changes. He would constantly question decisions agreed with the management team, change his mind from one meeting to the next, stop agreed to an allocation of resources to new structures, and take people off the special task forces, without notification. Here we see the formal use of hard power to satisfy self-interest over the firm’s longer-term value.

Navigating the terrain here relies on drawing on formal sources of power, rather than fighting against them. Your best bet is to redirect the energy of a dysfunctional leader, either through reasoned argument or by appealing to their interests. For example, in the case of the advertising company, senior executives used the argument of “leaving a legacy” to get the Chairman to see how he was undermining his own and company’s long-term interests. In fact, it was this sort of political behavior and misuse of power that inspired Max Weber, a sociologist an early organizational scholar, to write the classic book Bureaucracy, where he argued that bureaucracy was the most rational and best way to organize and co-ordinate modern corporations. This leads us to take the high ground.

The High Ground

The high ground combines formal authority with organizational systems; I use the term to describe the rules, structures, policy guidelines, and procedures that form the basis of political activities. The benefits of these rules and procedures are they provide a check against the whims of individual level, charismatic or autocratic individuals. Thus, the ‘high ground’ provides guide rails for the rocks. It’s a functional political. a process that uses structures of control systems, incentives, and sanctions that keep the organization in compliance. However, as many executives know, rules and procedures can also lead to the company becoming overly bureaucratic, where rules are used as a political device to challenge interests not aligned with the bureaucrats or to prevent innovation and change.

If you find yourself stranded on the high ground, take a lesson from one company that used feedback from clients, customers, and end-users to highlight difficulties and make the case that the current structure was constraining the organization. Since organizations, where the high ground is a problem, tend to be risk-averse, you can also try emphasizing that not changing can be even riskier than trying something new.

You can also argue that a separate group or task force needs to be set up to examine an issue or bridge silos. It creates a working space outside of the mainstream structures, norms, and habitual routines of the organization, providing an alternate source of power. Such groups can also revitalize innovation and change.

For instance, a public agency was having problems collecting revenues because the structures were slow and had to follow formalized steps to stop potential fraud. It meant that millions of tax revenues were not collected at the end of the year. Senior leaders decided to set up a dedicated task force outside of the formal organizational structure to solve the problem. After the first year, they had reduced the problem by over 50% and reached a 95% recovery rate by the second year. The organization then changed its official processes to match these improved methods. Other well-known examples of similar methods include the changes at Nissan, pilot projects at Asda, and companies opening up Innovation Labs in Palo Alto to remove the barriers of bureaucracy.

The Woods

In addition to their formal processes and guidelines, organizations also have implicit norms, hidden assumptions, and unspoken routines — and that’s where we get into “the woods.” The woods can provide cover and safety for people in your organization, or they can be a bewildering place where good ideas and necessary changes get lost. Thus, here it is important to understand the woods from the trees as you can miss the former if you focus on the symptoms rather than the hidden barriers to strategy execution.

Strong implicit norms can define what is even discussable. In some organizations, for example, displays of emotion may be seen as socially undesirable, and so the organization finds ways to marginalize, ignore, or reframe any emotions that are shown. In other organizations, the display of certain emotions are essentially mandatory — think of the smiling flight attendant.

For example, consulting to a newly merged, international telecoms company, we conducted a simple exercise using the culture web framework to help each of the newly merged entities to describe their own cultural norms and those of the other parties. It quickly generated truths and myths that could be discussed and used to iron out blockages in them rolling out their distribution and cable network — the key to capturing subscribers and business operational success.

Understanding the political terrain can help executives fight dysfunctional politics. But it’s also important to recognize that each landscape also contains positive dynamics. In either case, try to understand the drivers rather than just judge the behaviors. Project leaders who do can avoid the hidden traps of political dynamics, defend themselves against the dark side of politics, and use what they know to support wider organizational goals will find it easier and get more skilled engaging in positive political behaviors at all levels of the organization.

5% Better Customer Retention Can Increase Profits by 25% to 95%.

customer service increase profits ron palinkas national service manager

7 Customer Support Hacks to Increase Sales, Build Better Customer Relationships, and Grow Your Business




How many times have you seen customer support “tips” that are vague and totally useless for your business?

“Be human.”

“Have a voice.”

“Be thorough.”

All perfectly reasonable advice, but what are you supposed to do with it?

Instead of ambiguous catchphrases, let’s talk about real, actionable customer service tips that you can use to do what matters – grow your business.

1. Upsell and Cross-sell (When It’s Appropriate)

A customer support interaction, on its own, is not a sales opportunity.  Your first job when a customer contacts you for support is to solve their problem, to make them happy.  If you do that, there could be an opportunity to systematically grow your business through your support team while helping your customer succeed.  For it to be okay to sell in a support situation, two conditions have to be true:

A) The customer has to be happy with you.

Never try to sell a solution to an angry customer. It makes them angrier, and it makes you look bad. The customer must be happy and have positive feelings toward your company and the preceding support interaction.

B) The customer has to have an unmet need that you can help with.

You’ve solved your customer’s problem, but did the interaction reveal that there’s more value you can deliver for them?

Chris Yeh, an investor, entrepreneur, and the VP of Marketing for PBworks, shares a great example of a well-done support upsell when he called Geico for roadside assistance.

chris yeh quote

Just remember: never try to sell anything to a customer who doesn’t need it (and never try to sell anything to an angry customer). Always make sure that, first and foremost, you’re delivering awesome support. Once you have that down, it becomes much easier to do more for your customers.

2. Skip the FAQ

At Buffer, rather than use a FAQ section or knowledge base, the support team prefers to have every confused customer send a support email.


Simple: if every customer found the answer to their issue online, Buffer would not know how widespread the problem is. But, when they get 55 emails about the same issue, the support team can report it to the product team, which then prioritizes improving the app to remove whatever was causing 55 customers to be confused.

Chief Happiness Officer Carolyn Kopprasch explains that “we try to give our customers very few chances to find an answer without letting us feel their pain first.” This simple chart explains their process:

buffer support process

It’s a simple but powerful idea: spend a little more time answering questions on the front end, and improve the experiences of your customers forever.

3. Send a Handwritten Note

As an online business, your customers expect to get emails from you.

And, with most online businesses, those emails are where customer communication begins and ends.

But, what happens when you break the digital plane, so to speak?

What happens when you go beyond the emails that customers expect and surprise them through other, more traditional channels?

Think about how it feels to get an email. Then, think about how it feels to get a real paper envelope in the mail, with words that someone took time and care to handwrite just for you.

It feels pretty good, and it sure sets the sender apart from every other service provider bombarding your email inbox.

Here’s an example from the team at Stride:

stride handwritten note

Personal support doesn’t have to be confined to your helpdesk. Charm your customers with something more tangible; and if your results are like ours, they’ll reward you with their loyalty.

4. Reduce Customer Effort

In 2007, the Customer Contact Council surveyed 75,000 customers who had recently contacted a company for support.

What they found was fascinating: even more than “delighting” customers, what drives customer loyalty most is reducing the amount of work the customer has to do.

To apply this insight, think about how you can remove steps from whatever your customer needs to do to get their problem solved.

Do they need to follow a link and fill out a form to make updates to their account? Make the updates for them.

Do they need to return something to you? Send them the shipping label.

Do they need to take steps to troubleshoot an issue they’re having? Set up a screen share on Skype or Google Hangouts and walk them through it.

But, to really go above and beyond, reduce customer effort before they even reach out to you.

I use WP Curve to manage my WordPress blog. They handle tasks like updating plugins, making sure that integrations are installed correctly, and fixing all of the CSS that I’m great at breaking. Most of the time, I don’t even have to ask for help, because they send me emails like this one:

wpcurve support

They do the work, and it takes me zero effort to get more value out of my relationship with them. That’s why I’m a happy, loyal customer.

5. Use Reciprocity to Increase Retention

There’s a powerful psychological concept called reciprocity. The idea is that if someone does something nice for us, we’ll probably do nice things for them, and vice versa for people who do mean things to us.

It seems like a ridiculously simple concept, but it actually plays a huge role in our daily lives.

One study observed that when restaurant waiters delivered candy to diners along with their checks, tips went up.

more tips with candy

What’s more, when the waiters came back afterward with extra candy, the tips got even bigger.

The researchers attributed the response to the power of reciprocity.

You can harness the power of reciprocity in your support interactions to deepen your relationship with your customers (and make them more likely to continue doing business with you).

All you have to do is think about what “candy” they might appreciate. How about an ebook, a free guide, or a credit to their account?

It can be small, but the key is that it has to be a nice surprise. Offer it at the end of your support interactions, and your customers will reciprocate by doing nice things for you.

6. Identify, Track, and Act on Your “Red Flag” Metrics

When we looked at our onboarding metrics, we found there were two metrics that seemed to be the most significant in the first 30 days after a user signs up – length of first session and frequency of logins.  We found a large difference between the behavior of our churning users and the behavior of those who continued to use our service.  There was a difference in total number of logins as well (and I’d recommend tracking it), but it wasn’t as disparate as the other two, so we focused on those.

Looking at one cohort (thanks to KISSmetrics for making this kind of data analysis simple), the average user who did not quit after 30 days spent 3 minutes and 18 seconds using our service in their first session, and they logged in an average of 4.4 times a day. The average user who quit spent 35 seconds in their first session, and logged in an average of 0.3 times per day.


That’s a massive chasm.

We began to send targeted emails to users who spent less than 2 minutes in their first session, as well as to those who (regardless of first session time) logged in fewer than 2 times a day in their first 10 days.

The first group was offered help setting up their mailbox:

setup mailbox offer

That email got a 26% response rate, and more than 40% of the users who walked through their signup with us were still customers after 30 days.

The second group – many of whom had already set up a mailbox but had simply tapered off usage afterward – received a slightly different email, this time offering a personalized strategy session:

strategy session offer

The response rate on this email was just over 15%, and nearly 50% of those users remained after 30 days.

In fact, the success of both of the campaigns has led us to implement similar tactics for onboarding all new users.

Look at your metrics and find the disparities between your most engaged users and the ones who’ve quit. Then, use what you learn to identify at-risk users, and get involved with them right away.

(More on Red Flag Metrics here)

7. Feed Your Customers’ Cravings

How do you react when one of your close friends calls?

Do you robotically ask them how you can help? Or, do you ask them how their day was (and mean it)?

Derek Sivers founded CD Baby, one of the most storied online music sites in the history of the web. Well before Zappos existed, CD Baby built their success on amazing customer support.

Sivers recently shared a story about how they leveraged every support interaction to deepen their customer relationships.

derek sivers quote


While many people think of customer support as a cost of doing business, the numbers don’t lie: customer support pays off.

One Bain study found that increasing customer retention rates by 5% can increase business profits by 25% to 95%.

By using the strategies above, you can be on your way to achieving profits like that for your own business.

About the Author: Len Markidan shares customer service tips to help small businesses increase retention, loyalty, and revenue at the Groove Customer Service Blog. You can also follow him on Twitter.