Putting Detroit on the Road to Recovery

For twenty-five years General Motors, Ford and Chrysler have resisted common sense. Now, their leaders have flown into Washington, D.C. on their corporate jets begging Congress to give them billions in another federal bailout scheme. They just don’t get it. These auto giants are grossly mismanaged and misdirected from the top down. Their woes are self-inflicted. Under their current management apparatus the Big Three are unworthy of any federal bailout. Let them take the first step on the road to recovery by filing for bankruptcy.

Certainly, consumers don’t want these companies to go out of business. But, to provide them with billions of dollars from the federal government will only exacerbate the current problem. What Detroit needs is a leadership lobotomy -- from the head down.

For starters, the Big Three can eliminate many of the perks that are symbolic of management’s arrogance. I’m talking about the corporate jets, the executive dining rooms, and the huge bonuses senior management has received for over-promising and under-delivering to shareholders.

Secondly, the United Auto Workers needs to wise-up. As Lee Iacocca once remarked in the 1980s, “We have jobs at $40 an hour, but we don’t have any jobs at $75 an hour [adjusted for inflation].” The UAW needs to approve new labor agreements that bring workers’ costs in line with Honda, Nissan and Toyota which are capturing increased market share because their unit costs are considerably lower than the Big Three.

Retiree benefits must also be reduced so that the Big Three’s pension costs are in line with their foreign competitors. Workers deserve a reasonable wage, but under the current labor agreements, the Big Three cannot compete. Unless the UAW agrees to dramatic wage cuts its members will find themselves unemployed and Detroit will suffer.

Next, the boards of General Motors and Chrysler must bring in new management teams. The ideal leadership will come from outside the auto industry. They need to break the mold as Ford Motor Company did by hiring Alan Mulally from The Boeing Company. While Mulally is struggling, he is making progress and instituting long-overdue changes at Ford. Fresh thinking and innovation should rule the day at the Big Three. Quality must be rediscovered and incentives for eliminating defects should be instituted to inspire workers to build quality cars and trucks the first time!

The Big Three’s biggest challenge is to project into the future and understand what consumers want and need. That’s pretty simple according to most consumer surveys and the recent spike in gasoline prices. Consumers want options. Consumers want fuel efficiency -- and I’m talking about 50 miles per gallon not a measly 21 mpg. And, we want electric cars and other types of clean fuel-burning motors that don’t pollute the environment. These types of innovations will invigorate the huge supply chain that feeds off Detroit. Certainly, the thousands of suppliers deserve a chance to demonstrate their talents in terms of going Green and helping a revitalized Big Three enter a new era of auto-making. But, they will remain stuck in neutral as long as Detroit continues to think backwards.

Finally, shareholders and bondholders need to pony-up. They gambled on the Big Three and, frankly, they lost. Let’s not burden American taxpayers without first putting the onus on those investors who clearly understand the odds associated with any stock purchase. It might be smart to remind them of the old adage, “Sometimes you win and sometimes you lose.”

Ironically, despite their serious financial problems, General Motors, Ford, and Chrysler have an abundance of talented people throughout their ranks. These people have great ideas that should be solicited and implemented. Often times, it’s the workers who know best how to fix management’s mess. It’s time Detroit got some inspired leadership that abandons the re-treaded ideas of the past that have gone flat. What the Big Three desperately need is a plan for success instead of trying to further bleed American consumers and taxpayers with another ill-conceived bailout.

About the Author:
Thomas Hinton is president of the American Consumer Council. He can be reached at tom@americanconsumercouncil.org

What I Did on My Summer Vacation

By Bill Kalmar

For some, Labor Day signals the end of summer as preparations for autumn and the accompanying holidays begin. As is customary in some locales, warm weather clothes, including one’s white wardrobe and shoes, are returned to the closet until next spring. Children and students go back to school, much to the delight of their parents, and hopefully to the excitement of their teachers.

Chances are one of the kids’ first assignments will be to draft a report on the activities of their summer vacation. Not to be left out of this assignment, I thought it appropriate that I pen a few lines about one of our recent trips. There were no death-defying rides on some monster roller coaster, no surfing in shark-infested waters or aerial descents with a parachute from a plane, just a sensible trip to Chicago for my wife and me.

What made the trip so memorable was something I wrote about in my August column for QualityInsider (Online at www .qualitydigest.com/content/quality-insider.) The column recounted several encounters with poor service, and thus I concluded that I was in fact a magnet for service personnel and organizations that don’t practice performance excellence. Well, traveling to Chicago convinced me that somehow I had been demagnetized, at least on this one occasion.

Off to a good start

Our trip began early on a weekday as we departed our home in Lake Orion, Michigan. Our first stop was The Big Apple Bagel. As we opened the door, the aroma of fresh bagels and coffee wafted into our nostrils. Three upbeat and smiling clerks greeted us with a hearty good morning--and this was 7 a.m. It’s no wonder that this particular location is well frequented by regulars and transients alike. We left, bagels and coffee in hand, knowing that our trip was off to a great start.

Motoring to Chicago took us on the Indiana Toll Road. Often, those manning the toll booths are cranky and don’t engage in many pleasantries. Perhaps the toll road commission had everyone read Jim Collins’ book Good to Great ( Harper Collins, 2001 ) because we were met with friendly greetings at each booth. Somehow that lessened the strain of doling out a couple of bucks every 50 miles or so.

We arrived at our hotel, blocks away from the Magnificent Mile, just after noon. Our room wasn’t ready, so to take the sting off our having to wander the streets of the Windy City in our traveling clothes, the hotel gave us a room upgrade.

After a five-hour trip, which included the last 30 minutes in typical Chicago traffic, we were ready for lunch. One of our favorite haunts in the Toddling Town is Gibson’s Steak House on Rush Street. Sitting on the enclosed street-level porch gives one a view of the horse-drawn carriages trekking through town and the hundreds of shoppers toting their bags laden with one-of-a-kind purchases that can only be found in Chicago. It seems that no one in the town realizes that there is a recession underway. The streets were crowded, and restaurants and hotels were at capacity.

Our lunch was an epicurean delight even though my medium-rare steak was a bit overcooked. Our waitress, Deena, noticed the lack of rare red beef on my plate and suggested that she would have another one prepared. I politely declined and stated that it was still just fine. When our bill arrived, Deena had unexpectedly taken the cost of my steak off the bill. She did this without my having to raise an eyebrow or growl about the preparation. This signaled to me that I was in the process of being demagnetized.

After lunch we wandered into the Neiman Marcus store. Prior to our trip, we had received a phone call from a Neiman Marcus employee, Naomi, indicating that some items I might be interested in were on sale, but that after the first of the month the prices would be increasing. As we walked into Naomi’s sales area, she greeted us by name and was genuinely excited to see us again. Our last visit had been the previous year, but her ability to remember names and faces is uncanny. While in the store, I noticed that Naomi maintained a huge three-ring binder of the names and phone numbers and past purchases of all her customers. Her practice of contacting customers personally when sales develop is no doubt one of the reasons why Neiman Marcus regularly posts sales increases and profits while other stores are incurring losses.

Those of you who are watch aficionados like me would certainly enjoy window-shopping at the Tourneau store in the Water Tower. Being greeted by name by Michael, the salesperson who sold me a watch three years ago, is something that still makes an impression on me. Like Naomi at Neiman Marcus, Michael remembers names and even the type of watch I purchased. Maybe he anticipates me buying another one shortly?

Quality experiences continue

The next day saw us walking over to another of our favorite restaurants--Tucci Benucch. It’s a small Italian restaurant in the Bloomingdale’s building. For us, a trip to Chicago isn’t complete without enjoying the great salads at this little nook on the sixth floor. To our surprise and disappointment, the restaurant had now morphed into “Frankie’s Pizza,” although we were told that it was under the same management. We dined, but it was difficult to hide my disillusionment at losing our favorite lunch haunt. Our waitress must have picked up on my vibes because when we returned home there was a message on our voice mail from the restaurant’s manager indicating that many of the same menu items from Tucci Benucch could still be ordered if we asked. Just another indication to me how embedded customer service is in Chicago.

Even the cabbies get it!

Cab drivers were equally pleasant and customer-focused even though it took us several days to catch our breath from the Indy 500-inspired drivers who dart around the downtown area as if they were vying for the pole position for the next race.

As you can see, our voyage to the Windy City was an example in performance excellence. And it didn’t end there. When we returned home, I received an e-mail from The Wall Street Journal, which is indicative of its strong focus on customer service. Here is an excerpt: “We see that delivery of your Wall Street Journal was scheduled to resume today after a temporary suspension and are following up to check that it did.” Wow! Is that great service or what?

In other news

I hope that you’ll permit me to opine on some other topics.

I recently purchased a polo shirt from Macy’s and attempted to have Lord & Taylor match the price. I wrote Lord & Taylor about the incident, and their reply indicated that I would hear from “the appropriate department and someone will be in touch with you within five to seven business days.”

After a wait of three weeks, I contacted the store again. A reply finally arrived indicating that “Lord & Taylor does not have a practice of matching prices.” Perhaps the delay was attributed to the management formulating a policy? Who knows, but it tells me a lot about how it resolves customer service questions.

More and more defective products continue to enter our country from China. We are now told to check our tire pressure in the wake of a recall of as many as 30 million replacement rubber valve stems. These defective parts can crack prematurely and cause tires to lose air. At highway speeds, this loss of air could result in a loss of control with a resultant crash. It’s time we boycott Chinese products until such time as that country raises its level of quality. At this juncture, what with all the lead-based products that we have banned, I think a total ban on products from China isn’t out of the question. What do you think?

If you have noticed a downturn in customer service in some segments, let me offer an explanation. Here in Michigan, there are thousands of automotive professionals who have been outsourced, downsized, or as we say--fired! These highly qualified people now find themselves working in positions much below their level of expertise, and as such, their attitude and demeanor in dealing with customers isn’t what you would characterize as exemplary. As we frequent the various restaurants and stores in our area, I often question how long the person has been employed. What I’m finding is that there are many college grads and MBAs who are now flipping burgers. This no doubt does not make for a pleasant experience for them or the customers.

Speaking of restaurants, the Ruby Tuesday chain is looking at changing its theme by eliminating the 1980s-style décor of black-and-white checked tablecloths and Tiffany-style lamps with brass rails. There will be a new menu and a more contemporary look. Let’s hope that the consultants who are working on this project aren’t the same ones who worked on Bill Knapp’s restaurant chain. In my opinion, changing the theme and focus of this chain ultimately put them out of business. How I miss those chocolate cakes!

What would one of my articles be without a plug for my favorite hotel--The Ritz-Carlton. The J.D. Power & Associates 2008 North America Hotel Guest Satisfaction Index Study finds that the Ritz-Carlton won again as the top-scoring chain in the luxury category. Others that led in the survey included Embassy Suites in the upscale category, Hyatt Place for mid-scale full service, Drury Inn & Suites for mid-scale limited service, and for the seventh consecutive year, Microtel Inns & Suites took top honors in the economy/budget category.

Back to the hammock

Well, as I’m writing this article, the dog days of summer are coming to an end and cool nights are upon us once more. Hanging out in the hammock is still my top choice for a restful afternoon, and I hope all of you have that special place where you can relax and maybe, if I’m not being too presumptuous, ponder these words. If something resonated with you or some of my rants irritated you, please let me know by writing to the e-mail address at the bottom of this page. I personally respond to every e-mail. Until next time, remember the quote from Jonathan Swift: “You cannot reason a man out of something that he did not reason his way into.”

And by the way, as a result of our trip to Chicago, where we experienced wonderful service, I no longer attract metal shavings to my body. I have been poor-service demagnetized--at least for the moment.

Wall Street Cries 'Wolf' Over Credit Crunch

As President Bush addressed the American public last night on America’s latest crisis -- our nation’s economic credit crunch -- I couldn’t help but recall what Marcellus said in William Shakespeare’s play Hamlet. “Something is rotten in the state of Denmark.” Certainly something is terribly rotten in the United States when a crisis of this magnitude mushrooms overnight and requires a $700 Billion solution. What in the world is going on with our national leaders?

Americans are being told by the president that our national economy -- the same economy that just last week was “fundamentally sound” according to Senator John McCain -- is facing a near-Depression disaster due to a meltdown of the credit markets which resulted in the failure of three major Wall Street banks that controlled hundreds of billions of dollars in devalued mortgages and other questionable loan derivates. The Bush Administration’s solution is simple. Congress should hand over $700 Billion to Secretary of the Treasury Henry Paulson, a thirty-year veteran of Goldman Sachs, one of the two remaining giant Wall Street firms that are teetering on the brink of collapse due to poor investment decisions,

There’s no denying we have a serious problem. But, the question that must be resolved by Congress before it hands over $700 Billion to Secretary Paulson to dole out as he sees fit is this: Is this Wall Street’s problem or is it Main Street’s problem? If the answer is Main Street, we have a serious crisis and Congress needs to take immediate action. However, if the answer is Wall Street, perhaps Congress needs to take a deep breath and try to understand the ramifications of the problem before endorsing the Bush Administration’s two-page, $700 Billion bailout solution.

American Consumers are very skeptical of the Bush Administration’s solution for ailing Wall Street financial companies. So far, consumers don’t like what they’re hearing. According to a Bloomberg/Los Angeles Times poll, Americans say Congress should reject the Bush Plan. By a margin of 55 percent to 31 percent, Americans say it's not the government's responsibility to bail out banking companies with taxpayer dollars, even if their collapse could damage the economy. Furthermore, Americans are now blaming Wall Street and President George W. Bush for the credit crisis.

The debate is running so hot that political analysts are suggesting that any member of Congress who supports the Bush Bailout is in jeopardy of losing their seat in the November 4^th election. This is causing both Democrats and Republicans to take pause and reconsider their options -- and they should! The right solution has not yet been found.

If the problem is a potential failure of major Wall Street banks, which are holding hundreds of billions of dollars in depreciating loans such as mortgages, a different solution will be required so that consumers can still access money for various loans such as auto loans, mortgage loans, college tuition loans, and so forth. Small businesses will also need money in the form of loans to purchase inventory, make payroll, and capitalize their businesses. These are important issues that the Bush Administration and Congress must evaluate. To allow a credit freeze to occur among the major banks could have serious negative consequences for Main Street.

But, having said that, the bigger issue is what will happen to Main Street if Congress does not act and the remaining Wall Street banks fail or face a fire sale? This is the dominant issue that concerns consumers because most of their money is deposited in local banks and credit unions not in Goldman Sachs and other vulnerable Wall Street financial institutions. It’s the Main Street banks and credit unions that control the 90-day revolving loans of their small business clients. It’s the Main Street banks and credit unions that will reject new loans and demand higher cash deposits if credit is tight. But, this is not yet happening. In fact, some of the large banks are eager to make loans at below-market rates. So, given the doom-and-gloom messages coming from the Bush Administration, someone in Congress needs to call a time-out and ask for a replay. What is really happening here?

Is this a case of Wall Street and the Bush Administration crying “wolf” in an effort to bailout their long-time supporters and cronies? Or, is this a serious financial crisis that could paralyze the global economy? Many consumers don’t care what happens to the Wall Street firms. Perhaps, this is being narrow-minded on their part, but consumers are more concerned about keeping their jobs, paying their bills, and avoiding foreclosure.

Certainly, the one area that must be addressed immediately by Congress is the troubling number of home foreclosures. I believe this is the number one problem in the American economy because so many industries are linked to home ownership. According to government figures, there are nearly 10,000 home foreclosures taking place every day. This is a very serious problem that Congress must fix in the next thirty days because home ownership is the bedrock of America’s middle class. It is also the primary source for most local and state taxes. To allow millions of homeowners to be foreclosed on due to rigged sub-prime loans and a series of complex financial equations that baffle most economists is unfair and will undermine the American economy faster than any other single economic problem.

I recommend three steps to help solve our current economic crisis. First, Congress needs to immediately freeze all home foreclosure actions for one year and create a new agency, The Homeowners Resolution Trust Corporation (HRTC), which would purchase all troubled mortgages and renegotiate those loans with homeowners through local lenders and banks. By creating a one-year moratorium on foreclosures, the federal government can buy time to sort through all the troubled home loans, arrange for refinancing on those mortgages that can be salvaged, and retain the deeds of trust as a means to protect taxpayers from getting fleeced. This would give threatened homeowners some breathing room to resolve their financial problems. It would also allow local and state governments to recoup back taxes that homeowners have failed to pay. Finally, it would pump money into hundreds of local economies through local banks and credit unions that agreed to sell their troubled mortgages back to the HRTC and close their books on those mortgage loans. This step would give local banks more lending capital to revitalize local communities and small businesses. The HRTC would create federal standards and guidelines to ensure only valid mortgages are re-purchased by the HRTC from certified banks, credit unions, and other lenders.

Secondly, the federal government should tighten the requirements used by Freddie Mac and Fanny Mae for buying federally guaranteed mortgage loans. Just thirty years ago, prospective homebuyers had to meet very clear criteria before they could buy their dream home. We need to return to those days of fair and reasonable guidelines to ensure stability in the home purchasing process..

Thirdly, Congress should reinstitute stiff regulations and severe criminal penalties -- including prison time and hefty fines -- for those corporate officers and directors who violate SEC laws and try to fleece shareholders and taxpayers. The era of Anything Goes on Wall Street needs to end! Tough laws and enforcement by federal agencies can eliminate the shady dealers who are peddling under-valued derivatives and sub-prime loan schemes.

Those unscrupulous people who perpetrated this financial ponzi scheme on Wall Street would like us to believe that consumers, who purchased their homes on good faith and credit, are to blame for the current economic mess. But, Americans know better. The real culprits are the very people who are now crying ‘wolf’ and lobbying Congress -- and the American taxpayers -- to bail them out. You’ll see their ads in major newspapers and on the television networks. Beware of them. There are three culprits who got us into this pickle and now want us to bail them out. They include state and federal regulators who allowed banks to shift billions of dollars of questionable credit off their balance sheets and into the hands of unsophisticated foreign investors who were lied to. They also include hedge-fund managers and pension-fund managers who purchased sophisticated high-yield debt instruments they didn't understand and now cry mea culpa. Finally, we can blame the over-educated economists and bankers who fabricated mathematical equations and promoted their flawed lending models that enticed unsuspecting banks to purchase those high-yield debt instruments.

There’s no question that there is a hungry wolf out there. But, Congress should act cautiously as it attempts to sort through this economic mess. Certainly, we must avoid a credit meltdown. But, if Main Street can still function without burdening the American taxpayer with $700 Billion of Wall Street debt, perhaps logic and reasoning dictates we save Main Street and leave the bulls and the bears to the wolves.

About the Author. Thomas Hinton is president of the American Consumer Council, a non-profit consumer education organization with 85,000 members. He can be reached at: tom@americanconsumercouncil.org

Empowerment

by Bill Kalmar

I think most of us would agree that there are a handful of attributes that separate average companies from those that should be held up as role models. Some of those traits would be: a strong and achievable strategic plan, management interaction with staff and customers, well-trained employees, a passion for excellence, a silo-free organization, an open-door policy, and a team of professionals who are empowered to perform their job without constant management intervention, to name just a few.

Of all those traits, I would place empowerment at or near the top. Organizations that properly train and empower their staff operate more efficiently and do a better job of meeting and exceeding expectations of customers. There’s a minimum of lag time in resolving problems or disputes with customers because each employee can take the appropriate action without kicking it upstairs.

In examining the reasons for employees’ lack of power, one has to conclude that managers are afraid to let go of their decision-making domain. Carrying that concept a bit further, I contend that quality is greatly diminished in an organization unless people are empowered.

Most of us have at some time been involved in a transaction that required a company’s agent to seek guidance or approval or permission from another person. This is a time-consuming practice that irritates customers and humiliates employees because he or she realizes that they’re nothing more than a figurehead lacking authority to perform even the most mundane tasks.

Permit me to provide you with two examples of an extreme lack of empowerment. In my tenure as director of the Michigan Quality Council, my office was at a major university. Once when I needed a meeting room, the conference rooms in my department were all occupied, so I wandered onto another floor seeking an unoccupied room. There was an available room in the history department, but my request would have to be approved by the department head, who was out for the day. No one else could give the OK, because he hadn’t deputized anyone to act in his stead.

The receptionist said that if the Keeper of the Keys learned that the room had been used without his approval there “would be trouble.” Armed with that information and the theory that it’s “better to seek forgiveness than approval,” I used the room anyway, much to the dismay and consternation of the history department. For the absent professor, I left a short write-up on the advantages of empowerment with the receptionist. I wish he had responded.

The second example is from a national restaurant chain where my wife Mary and I frequently dine. As with numerous other dining establishments, this restaurant provides their guests with a card whereon visits are logged—after the purchase of eight meals you get a free dinner. We dutifully bring in our cards each time and have the cards stamped by the staff. After we surrendered our cards for a free meal, we discovered that the restaurant had exhausted their supply of new cards. We were to bring in our receipt at our next visit, when more cards would have arrived. I’m nosy, so I asked why someone hadn’t noticed earlier that the supply of cards was low and ordered more.

It seems that a vice president at headquarters, let’s call him the King of Cards, is the only person responsible for ordering these cards. All requests have to be routed through the king, who then doles out the cards to the various restaurants. My suggestion that each restaurant be responsible for ordering its own cards met with agreement from the restaurant management, but as in many organizations, altering an existing procedure through a labyrinth of senior management is cumbersome and difficult. I’d like the Keeper of the Keys to meet with the King of Cards and see what other blockades they could invent to stifle productivity. Both of these management dinosaurs should be jettisoned from their organizations, or at least made to write the phrase “Empowering my staff adds to customer and employee satisfaction” a thousand times on a blackboard.

Baseball and showerheads
Motoring to New York recently to watch the Detroit Tigers play the Yankees at Yankee Stadium taught me two life lessons: Mayor Michael Bloomberg is genuinely a man of the people, and when it comes to height standards at a national hotel chain, size does matter. Permit me to explain.

For my 65th birthday my son and I attended opening day at Comerica Park in Detroit. The Tigers lost but the day was salvaged when my son presented me with tickets for an upcoming Tigers/Yankees game in New York on his birthday and, as most baseball fans know, this is the last year for The House That Ruth Built—Yankee Stadium.

I wanted to surprise my son with upgraded seats, so I contacted Mayor Michael Bloomberg, Governor David Paterson, and Yankee owner George Steinbrenner and suggested that, if their seats for the game weren’t being used, perhaps a couple of out-of-town fans could be the new occupants.

Well-run organizations always respond to customers whether by phone, e-mail, or snail mail. I have made a habit of contacting organizations when I receive excellent service or when I have a complaint. Organizations that value their relationships with customers always respond, and those are the ones that retain my business and admiration. Then there are the companies that never acknowledge the contact, and that tells me everything I need to know about the management. Their lack of concern cascades onto everyone in the organization. No wonder service is shoddy.

Mayor Bloomberg took the time to respond, stating that he in fact doesn’t have season tickets but he sent a personalized letter to my son for his birthday hoping that he would enjoy his stay in New York. This reflects why he’s so revered in the Big Apple. On the other hand, judging from the poor condition of the reserved box seats, Bloomberg may be waiting for the new stadium to purchase season tickets.

We never received the courtesy of a response from Steinbrenner or Paterson. I realize that both of them receive numerous letters and requests every day but a simple “No, are you crazy?” response to my letter would have been a nice gesture. So Bloomberg goes to the top of my list of world-class mayors.

Let me say at the outset that the staff, the ambience, the food, and the surroundings at the Hampton Inn were first class. What was a bit disturbing was the showerhead, of all things. Entering the shower in the morning was like being a Lilliputian in a Brobdingnagian world. I’m 5'10", and the showerhead was positioned so high that I could adjust the water stream only by standing up on my toes. I’d just turned 65 and already I seemed to be shrinking. Upon checking out later that morning, I mentioned my experience to the front desk staff. Their response was simple and straightforward: Hampton Inns had done a survey and determined that the majority of their business traveler guests were 6'2", and the showerheads were adjusted to accommodate them. They raised the sinks, too.

I sent an e-mail to Hampton Inn management regarding this incident, which elicited the following response from the general manager: “Please accept my apologies for any inconvenience you experienced with our showers. Our hotel was constructed to Hampton brand standards, which specify showerhead heights. Until these specifications change, a solution would be to request a room with accessible features that have handheld showerheads”. In response I asked what would happen if I returned with a broken arm. How would I hold the shower wand, and would the hotel supply someone with a loofa to help me bathe. As with Steinbrenner and Paterson, I haven’t received a response.

All in all, it was a great trip. The Tigers swept the Yankees, and I’m doing stretching exercises in the event we return to New York and I need to take a shower.

As you read this, I’m resting comfortably after June 2 robotic prostate cancer surgery at Henry Ford Hospital in Detroit. The hospital is the pioneer in this type of surgery, having performed more than 3,000 such operations for people from all over the world, so I knew I was in good robotic hands. What makes it even more appealing (if surgery can be appealing) is that the hospital has partnered with the local Ritz-Carlton Hotel and thus patients for this procedure are transported back and forth to the hospital by hotel staff, and special arrangements are made at the hotel for pre- and post-surgery dietary needs. If one has to experience this type of operation—I’m told one in six males will—it’s comforting to have the best at one’s disposal.

As I relax in my hammock contemplating my next column, I just might arrange for a conference call with the Keeper of the Keys and the King of Cards so we can discuss empowerment. Wouldn’t that be a hoot?

About the author
William J. Kalmar has extensive business experience, including service with a Fortune 500 bank and the Michigan Quality Council, of which he served as director. He has been a member of the Malcolm Baldrige National Quality Board of Overseers and a Baldrige examiner. He’s also been named quality professional of the year by the ASQ’s Detroit chapter. Now semiretired, he’s a freelance writer for the Detroit News and writes a monthly column for Mature Advisor newspaper. Kalmar is a mystery shopper for several companies and a frequent presenter and lecturer. He also does radio voice-overs and competes in duathlons.

Avoiding Green Schemes When Getting Green Certified

by Thomas Hinton

Last week, during a speech to business executives, I was asked about the proliferation of Green schemes and how a company could evaluate the credibility of a Green Certification Program. Given the number of misleading web sites and schemers who are trying to make a fast buck from the Green Movement, here are five questions your company should ask before applying for a Green Certification program.

1. Is the Green certification program sponsored by a credible non-profit organization?

I strongly encourage companies to avoid for-profit ventures that claim to offer certification programs but, in fact, are fronts for some money-making scheme. The leading Green Certification programs are administered by viable non-profit organizations or associations that are legal entities and led by volunteers and a professional staff. Most non-profit organizations have been established for the public good and have bylaws and members. While non-profit organizations will charge a fee for their certification program, they do so to sustain their programs and pay their professional staff. Among the leading non-profit organizations that offer outstanding Green certification programs are the U.S. Green Building Industry Council, the American Consumer Council, the Forest Stewardship Council (FSC), Green Steam, and Green-e, which is operated by the Center for Resource Solutions. They are many more credible non-profit organizations, but these non-profit organizations are leading the way in the area of Green Certification.

2. Does the Green Certification program have written criteria and standards that govern the application and certification process?

Yesterday, someone sent me a link to an online green certification program managed by a mom-and-pop website. The alleged certification consisted of 32 yes/no questions. If the applicant answered a majority of the questions correctly, they earned the right to affix the website’s green-certified logo on their company materials. This type of green certification is bogus and does a disservice to the many valid green certification programs that have formal criteria and rigorous standards. Any Green Certification program that does not require your company to complete a detailed application and respond in-depth to serious questions regarding environmental compliance and sustainability is suspect. I should note that Green Certification for a specific product is even more rigorous and often requires some type of ISO-related certification compliance.

3. Does the Green Certification Program have a verification and validation process as part of its certification?

Two common elements among all credible sponsors of a Green Certification program are the verification and validation of the information contained in a company’s application for certification. In order to verify and validate the contents of a company’s application, an independent team of assessors or auditors is trained and certified to review the contents of the application against the criteria and, in some cases, conduct a site visit to verify that certain claims by the applicant are, in fact, being performed.

The certification of assessors or auditors should be done by the sponsoring organization or the American National Standards Institute (ANSI). In the case of the American Consumer Council, our Consumer Green Council is responsible for recruiting, training, and certifying its Assessors. Only then are certified Assessors assigned to review an application. Also, an independent Board of Judges reviews all recommendations for certification prior to any certification being awarded. In this way, there can be no collusion or conflicts-of-interest. This process ensures that only qualified applicants receive ACC’s Green C Certification designation. Other non-profit organizations have a similar process in place to ensure the integrity of their certification program.

4. Once your company is Green Certified is there an accountability step and a process for continuous improvement?

The most progressive Green Certification programs not only have contemporary standards and a strong verification process, but they also have a way to hold certified companies accountable to those standards after certification has been earned. In other words, a company cannot earn its Green certification and then engage in practices that violate the spirit of the certification program. Organizations like the Forest Stewardship Council (FSC) and the American Consumer Council have high standards in this regard and frequently review the practices of certified companies to ensure they are in compliance and striving to reach higher levels of certification.

5. Does the Green Certification Program have credibility in the marketplace?

Let’s face it, most companies are not altruistic. Very few businesses decide to go Green because they want to save the rain forests. Instead, their motives range from increasing their profits to boosting market share. Frankly, that’s fine. As long as there is integrity in the certification process, it doesn’t matter what motivates a company to get certified.

Based on my observations over the past few years, I can say that consumer acceptance of a brand or product that bears the Green C certification (or some other Green designation) is a strong reason for any company to go Green and get certified.

I’ve also witnessed an interesting transformation among executives as their companies go through a Green certification program. Typically, three things happen to executives. First, they begin to truly appreciate the growing number of Green Consumers and their purchasing power. Secondly, they begin to understand that their company is capable of doing many small, but significant things, to sustain our natural environment and planet. Thirdly, executives realize that their employees genuinely care about our planet and going Green is a smart way to engage employees in the workplace and stimulate innovative solutions to reducing costs and making their company more efficient.

About the Author: Thomas Hinton is president of the American Consumer Council and serves as the executive director of the Consumer Green Council, which administers ACC’s Green C Certification Program. He can be reached in San Diego, California at tom@americanconsumercouncil.org

What Makes a Good Employee?

by Bill Kalmar

May I have the envelope, please!

Each year at this time a momentous event is announced in the pages of a prominent magazine. No, I’m not talking about the Sports Illustrated swimsuit edition, although thoughts of that warm me up on frigid evenings in Michigan (sorry if that’s sexist). I’m referring to Fortune Magazine’s announcement of “The 100 Best Companies To Work For.”

For us quality and customer-service geeks it’s an opportunity to examine the inner workings of some of the best organizations in our nation. For the companies who applied for this recognition it’s a guessing game to see where they rank among some of their peers and who is labeled No. 1.

Ever since this list was first published I’ve been following and reviewing these companies like a broker follows blue chip stocks or a wine connoisseur absorbs Wine Spectator’s list of the top bubbly. We all want to work for an organization that espouses sound customer-service processes and provides employees with a safe, challenging, rewarding environment. Fortune Magazine lists those companies.

After the list is published each year, the featured companies are flooded with unsolicited applications. In fact, in the current edition of the list there’s a section entitled, “How To Get Hired By A ‘Best’ Company.” As the author points out, “Looking at the past decade, our top 25 each year have averaged job growth of 14 percent.” The author goes on to mention that it helps to know someone at the company, because thousands of people submit applications. Before it opened in 2006, the Doha Hotel in Qatar received 25,000 applications for 600 positions.

Before we get into the specifics of these companies, let’s first examine how they were chosen. There’s that special moment in the Oscar awards program where two or three sartorially correct accountants come out on the stage with a briefcase containing the envelopes naming the winners for the evening. Of course we learn how the balloting was done. So in imitation of the Oscars, here’s how “The 100 Best” were selected:

“More than 105,000 employees from 446 companies responded to a 57-question survey. Two thirds of a company’s score is based on the survey, which is sent to a minimum of 400 randomly selected employees from each company and asks about things such as attitudes toward management, job satisfaction and camaraderie. The remaining third of the score comes from an evaluation of each company’s responses to a culture audit which includes detailed questions about demographic makeup, pay and benefits programs, and open-ended questions about the company’s people-management philosophy, internal communications, opportunities, compensation practices, diversity programs, etc. About 1,500 companies participated in the survey. Any company that is at least seven years old with more than 1,000 U.S. employees is eligible.” (Courtesy of FORTUNE magazine)

I have used this listing in my presentations to illustrate the attributes of these organizations. In that regard, I first shared the following 12-point list with QualityInsider readers in “The Corporate Running of the Bulls.” Interspersed with that list are examples from the “100 Best” list:

What makes the “100 Best Companies To Work For” so great:

They make people feel that they’re part of a team or, in some cases, a family.

• With an average salary of $90,083, the 1,376 employees of American Fidelity Assurance call this Oklahoma insurer their “second family.”
• National Instruments yearly stages an employee-appreciation week with executives serving breakfast and culminating in a family outing day.
• Nugget Markets throws a year-end bash, and in 2007 took all of its 1,322 employees whitewater rafting.
• In 2007, as is the case every year, the Plante & Moran team gathers at its annual conference, an opportunity to bond. Partner Jeff Jenkins stated that the theme was to “amp it up,” which means that in workplace and with client relationships and in family-oriented activities, the staff was asked to ratchet it up another notch while living the “golden rule” (i.e., treat others as you would like to be treated) More energy results in better client service, a more enriching work environment and better results.

They encourage open communication, informing their people of new developments and encouraging them to offer suggestions and complaints.

• The CEO at Adobe Systems answers employee e-mails within 24 hours and employee councils feed management with ideas.
• After feedback from employees, SRA International switched insurers, added health savings accounts and adoption aid, and increased 401(k) matches.
• Four times a year employees at Nike are invited to an all-employee meeting where feedback and suggestions are encouraged.
• The head of Yahoo hosts monthly chat ’n’ chow lunches with employees and even answers employee questions online.
• Perhaps the lowest turnover rate in the hotel industry (18 percent) is attributed to J. W. Marriott Jr.’s visits to 250 Marriot properties each year and meeting with employees.
• Cisco Systems uses an employee feedback/suggestion system, “On My Mind.”

They promote from within, letting their own people bid for jobs before hiring outsiders.

• Eighty-five percent of managers at supermarket Stew Leonard’s were hired in house. This supermarket has been featured in many of quality guru Tom Peters’ columns. Here’s a bonus: CEO Stew Leonard Jr. has a surefire way to determine the strength of the economy: “I look for the mashed-potato effect. If customers are buying our freshly-prepared mashed potatoes instead of whole potatoes, then the economy is doing well. Lately, bulk potato sales have been going up, so there’s a concern about where the economy is going.” The so-called experts can cackle about their charts and their prognostications, but for me, I’m focusing any investments I might make on the “mashed-potato” metric.
• At S.C. Johnson & Son more than half of employees are over age 45, 28 percent have worked there more than 20 years, and 78 percent more than six years.
• Twenty-three percent of Herman Miller’s workforce are “Water carriers,” employees who have 20 or more years with the company.

They stress quality, enabling people to feel pride in the products or services they provide.

• Quick action by Mattel in recalling defective toys from China illustrated this company’s focus on quality and safe products.
• Granite Construction has a zero-accident goal and employees are rewarded, not fired, for bringing attention to unsafe situations.

They allow their employees to share in the profits through profit sharing, stock ownership, or both.

• Ten percent of employees’ pay is deposited into 401(k)s at Booz Allen Hamilton.
• Workers at Stanley own at least 50 percent of the company.
• How about a 43-percent stock price rise at EOG Resources, where all employees have stock options.
• Intuit offers all new employees stock options.
• Of the 3,558 employees of PCL Construction Enterprise, 2,200 employees own shares in the company, and many received dividend checks last year in excess of their annual salaries.

They reduce the distinctions of rank between top management and those in entry-level positions, and they bar executive dining rooms and exclusive perks for high-level people.

• Everyone gets overtime pay at David Evans & Associates.
• No one earns more than 10 times anyone else at TDIndustries.

They devote attention and resources to creating as pleasant a workplace as possible.

• Because during tax season the workplace is home six days a week for employees of Plante & Moran, management has designed a building with staff in mind: Custom wood stain throughout the entire building, work stations designed by focus groups, each staff member has his or her own space with a nameplate, and in the front lobby a huge assortment of flowers is replaced weekly. Dan Essad, human resources senior manager stated it best when he was interviewed recently by reporter Carol Marshall for the Oakland Business Review: “We care for our clients, we care for our employees, our community, our families, and that caring is reflected in our space.”

They encourage their employees to be active in community service by providing money to organizations in which employees participate.

• Every employee at Intuit receives four days off with pay each year to perform community service.
• Umpqua Bank provides 40 hours of paid time yearly for employees to volunteer in the community.

They help employees to save with matching funds.

• Aflac boasts a 401(k) matching fund.
• Seven and a half percent of salary is offered as profit sharing at Arnold & Porter.
• Genentech bumped up 410(k) match in 2007—100 percent up to 5 percent of pay.
• Here’s quite a bonus from Boston Consulting Group—15 percent of pay deposited in a retirement plan.
• Alcon Laboratories has the richest retirement program in U.S. business with employee contributions matched 2.2 to 1.
• A 15 percent of pay contribution by Russell Investments is part of their automatic profit sharing.

They try not to lay off people without first making an effort to place them in other jobs, either with the company or elsewhere.

• American Express had 6,000 internal job moves last year.
• There’s a no-layoff philosophy at FedEx.

They care about the health of their employees, sometimes providing physical fitness centers and regular exercise and medical programs. (This was a perk provided by too many companies to mention. This is a sampling.)

• Healthways has walking trails, bikes for rent, and easy-to-locate stairways to encourage exercise.
• Certainly this was to be expected—Nike has a decathletes dinner every year.
• Tennis and basketball courts are provided by AstraZenica.
• eBay has hired a full-time staff of personal trainers and nutritionists.
• A pool, cardio room, a racquetball court, putting greens, and horseshoe pits can be found at SAS Institute.
• At Goldman Sachs, where the average salary of $137,000 keeps people financially healthy, you will also find rock climbing, a martial arts boot camp, massage therapy and Pilates. Even with the over-the-top salaries paid here, the company will even outfit you with workout duds.

They expand the skills of their people through training programs and reimbursement of tuition for outside courses.

• Tuition reimbursement of up to $20,000 and bonuses for advanced degrees, which 65 percent of MITRE employees have, makes this a company that encourages learning.
• Let’s not undercut what Station Casinos is doing—free dealers school for staffers wanting to advance and gain new skills.
• Johnson Financial Group offers a graduate tuition reimbursement up to $10,000.

No. 1 is Google, which prides itself on having fun and minting millionaires. The stock just rose above $700 and 99 percent of employees have stock options.

There you have it. So update your resumes and start campaigning for that new job, unless you are fortunate enough to work at one of these extraordinary companies. I’m just pleased that all of you are still working and supporting my social security and Medicare.

P.S. Finally, for those of you who are anal-retentive like me, I did mention in last month’s column that I would report on two recent books, The Three Signs of a Miserable Job (Patrick M. Lencioni, Jossey-Bass, 2007) and one about General Electric—Jacked Up (Bill Lane, McGraw-Hill, 2007). I suspect that some of you have been searching for that. Rest assured that will be in next month’s column. I thought learning about the best companies better served me and you than harping on a miserable job. I hope you agree.

About the author
William J. Kalmar has extensive business experience, including service with a Fortune 500 bank and the Michigan Quality Council, of which he served as director. He has been a member of the Malcolm Baldrige National Quality Board of Overseers and a Baldrige examiner. He’s also been named quality professional of the year by the Detroit Chapter of ASQP. Now semiretired, he’s a freelance writer for the Detroit News; writes a monthly column for Mature Advisor newspaper; is a mystery shopper for several companies; is a frequent presenter and lecturer; does radio voice-overs; and competes in duathlons.

Editor's Note: This article appeared in the March issue of Quality Digest Magazine which can be accessed at: www.qualitydigest.com

Starbucks: Training or Retrenchment?

by Tom Hinton

An interesting thing happened this past week. On Tuesday evening, February 26, all across North America, Starbucks stores closed promptly at 5:30 pm and remained closed for three hours. With the exception of those Starbucks-licensed shops in supermarkets, airports, malls, hotels, and train stations, some 135,000 Starbucks employees gathered in various locations to complete three hours of training, motivation, and re-indoctrination.

While a handful of loyal Starbucks customers were locked out because they didn’t get the store closing message, most customers accepted this unusual occurrence and simply skipped their evening Java fix or found another place to hang-out with their laptop, book, or newspaper.

Since Tuesday night, a growing number of people have contacted me as “America’s Expert on Business Excellence” to ask the question: What’s going on with Starbucks? Due to the growing number of inquiries I thought it best to post this article on my Blog so that everyone got the same answer. Of course, listening to the voice of my customers, I discovered some interesting things that I didn’t know about Starbucks -- as much as I like the company -- and why Starbucks has been retrenching for the past year.

To borrow an adage from my parent’s generation, it seems that “what’s good for Starbucks is good for America!” But, lately, Starbucks’ slip has been showing! It’s evident from sluggish sales, leadership changes, and a myriad of other corporate problems that have been exposed. These problems and challenges have hurt Starbucks’ stock performance which has slid nearly 45% in the past year (Nasdaq: SBUX). It is currently selling at $17.98 per share down from a high of $38.29 on April 13, 2006.

Things got so bad for Starbucks that Howard Schultz, who had relinquished his title of CEO eight years ago in order to focus on the company’s customer experience and other life pursuits, reclaimed his CEO title on January 8, 2008. Schultz, who first joined Starbucks in 1982, is responsible for building Starbucks from a fledging coffee bean retail operation into the most prolific and successful retail coffee business in the world. Most Starbucks aficionados are not aware that Schultz left Starbucks in 1985 when his idea to establish Italian expresso bars in the Pacific Northwest was rebuffed by Starbucks’ original owners. Schultz had a passion for coffee and he left Starbucks to form his own company, Il Giornale, in 1985.

According to Wikipedia and Starbucks’ website, two years later, Starbucks’ management decided to sell its Starbucks. Schultz bought it and renamed Il Giornale to “Starbucks” and aggressively expanded the company’s reach across the United States. Starbucks popularized espresso drinks such as the cafe latte and introduced them to many Americans.

For 20 years, Schultz has done a brilliant job of building the Starbucks brand and expanding its reach around the world. He has given good jobs to more than 170,000 partners (employees), kept commercial real estate agents busy with the opening of more than 8,500 company-owed outlets worldwide plus 6,500 joint-venture and licensed outlets that employ nearly 70,000 adjunct personnel.

It’s fair to say that Howard Schultz has single-handedly created a cult-like following among millions of people who had previously only tasted freeze-dried coffee. There is no question that Schultz ranks among the best leaders in corporate America and his brilliant 20-year track record proves it. So, what has happened to Starbucks during the past 24-months? What changed?

I think the answer is a combination of three key factors:

First, there’s no question that economic pressures and the cost of making Starbucks coffee have taken their toll on the company’s profits and operating methods. This partially explains why Starbucks is slowing its growth and retrenching its efforts to focus on the basics of quality and superior customer service.

Secondly, given Schultz’s brilliant leadership and thorough understanding of the intricacies of the coffee bar retail business, his absence from the post of CEO created a Visionary vacuum inside the company. In turn, I think a “bean counter mentality” crept into operational decisions without taking into consideration two important factors: Culture and Customer Needs and Wants. Unfortunately, many of these internal changes at Starbucks were not well-received by customers who voted with their feet and tried the competition.

Thirdly, Starbucks got sloppy in terms of customer satisfaction, listening skills, and honoring its core values. While executives were busy crowding new products onto already-cramped retail floor space, and experimenting with things like books and CDs (which were positively received), store managers got distracted and seemed to be spending more time erecting marketing displays and banners instead of paying attention to their customers.

This misstep allowed Dunkin Donuts, McDonalds, and other aggressive local competitors to nip away at the once-loyal Starbuck customer base. Given the choice to pay $2.75 for a latte at Starbucks or 99 cents at Dunkin Donuts, many customers were seduced into trying a competitor’s brand. And, once a customer leaves, it’s very difficult to win them back.

So, fast forward to last Tuesday night’s “Art of Espresso” three-hour training when Howard Schultz took the stage and pronounced to his loyal and faithful partners, “Tonight, we will begin to elevate the Starbucks Experience for our customers. We are passionate about our coffee. And we will revisit our standards of quality that are the foundation for the trust that our customers have in our coffee and in all of us. But, as I think about it, there is another -- perhaps equally important -- reason why we have scheduled this training. It’s to celebrate who we are.”

After three hours of motivation, training, and re-affirming the Values and Quality Standards that have made Starbucks a great American success story, Schultz reminded everyone that, “We are Starbucks. We should be incredibly proud of what we have built. We are the worldwide leader of specialty coffee. And, believe me when I tell you, we are just getting started. We will overcome the difficult and humbling challenges we face, and will be stronger for it. You have my word on that.”

I have no doubt that given Starbuck’s recommitment to excellence and the reappearance of Howard Schultz as CEO that Starbucks will rebound stronger and healthier than before. But, he’s right. Sometimes it takes a “difficult and humbling challenge” (like dissatisfied customers and unfocused employees) to kick you in the head before you “get it!”

Now, if you’ll excuse me, I’m off to my local Starbucks to see if my favorite Barista is honoring Starbuck’s newest customer pledge: “Your drink should be perfect every time. If not, let us know and we’ll make it right!”

While I’m there, I might suggest Starbucks strengthen that pledge to read: “Your drink will be perfect because instead of chatting with other employees about why I hate my boyfriend, I’ll be listening very carefully to you as I take your order. And, I’ll repeat your order while using your first name to make sure that the Barista hears it correctly, too!”

Oh yeah, have a nice day!

Tips on Fighting Identity Theft

Courtesy of North Island Credit Union's Island Business Connection Newsletter, Winter 2008 issue

Nearly 10 million people were victims of identity theft last year and the incident rate is doubling every two to three years. North Island Credit Union encourages its members and other consumers to take steps now to reduce exposure to these crimes that cost the average victim 175 hours of personal time and $1,500 to correct.


One of our sponsoring member credit unions, North Island Credit Union of San Diego, California, recommends that you take several steps to protect your identity. First, make it difficult for criminals to obtain your social security number (SSN), your birth certificate, and all financial information. Treat these items like you would valuable jewelry. If you don't use them, don't carry them around with you. Keep them under lock and key. If someone requests this information in person, by phone, mail, email, or on a web site, you need to determine if it is a legitimate request. It's always better to politely refuse and stand fast in your resistance to share this information. [Note: the American Consumer Council and the California Consumer Council never ask for a member's SSN or checking account information].


If the medical insurance card in your wallet shows your SSN or that of another family member, ask your insurer to provide you with a card that does not contain your SSN. Alternatively, carry a photograph of the insurance card with only the last four digits of your SSN.



Given the number of financial statements, loan documents, and credit offers that arrive in the mail every week, we recommend that you rent a Post Office box, or have a locking mailbox at your home or business for confidential incoming mail. We also encourage our members to be careful with outgoing mail. Take it into the post office. Don't leave outgoing mail with payments and other financial information in an unsecured place. It's better to be safe than sorry.


In terms of paying your bills online, this actually has become one of the safest ways to conduct financial transactions provided the online merchant has encrypted software that prevents hackers from stealing your information in transit. Most of the established online payment systems are able to protect against identity theft thanks to sophisticated firewalls which they built into their software systems.


On that note, always be suspicious of an unsolicited email that asks you to provide any financial information. There are lots of scams out there and it's always better to "junk" these emails or telephone your financial institution (always use the number of the back of your credit card -- never use the the telephone number in the email) first before you ever give out confidential financial information or your SSN. Remember, most reputable financial institutions do not email you asking you to share your confidential financial information.



Also, it's safer to use a credit card than a debit card when buying items online. Also, we recommend that you use one credit card for all of your online transactions since it's easier to track any fraudulent activity this way.



Under federal law, you are entitled to receive a free credit report every 12 months from all three of the major credit bureaus. This includes toll free calls to: Experian, 888-397-3742 -- www.experian.com; Equifax, 800-437-4619 -- www.Equifax.com; and, TransUnion, 800-916-8800 - www.transunion.com Or, you can visit: www.annualcreditreport.com for more information on how to obtain a free credit report.



If you find any questionable charges on your credit report, immediately contact the financial institution or credit card company that processed the transaction to review the charge. Again, use the telephone number on the back of your credit card or credit union statement to contact the appropriate financial institution.



You also can file a complaint with the Federal Trade Commission at toll free: 877-438-4338; www.consumer.gov/idtheft; and, with local law enforcement or the US Postal Inspector. We encourage you to do this since fewer than 60% of identity theft victims do not notify law enforcement of the crime against them.



Finally, we strongly recommend that you shred all outdated financial documents before throwing them in the trash. This includes tax documents, credit card statements, credit union statements, old checks, and expired credit cards.



Remember, the key to protecting your identity is to make it very difficult for thieves to steal it!
For more information, please visit North Island Credit Union's Center at www.myisland.com

Some Unfinished Business for 2008

by Bill Kalmar

When finalizing my plans for a new year, it’s always gratifying to realize that all previous plans have been completed. As I recently went through this annual process, I noticed several issues affecting customer service and quality that I’d inadvertently left on the back burner. Consider this an early spring cleaning. With 10 inches of snow on the ground here in Michigan, it also prompts me to dream of warm weather and green, luscious golf courses.

Maybe it’s symptomatic of my being a senior citizen, but little things are beginning to aggravate me. As a starter, traipsing through the whole Medicare registration process is a calamitous journey that isn’t for the faint of heart. One needs a cadre of physicians, pharmacists, and legal beagles to assist in the navigation. It’s similar to a take-home exam, except most of the answers are not in the book. One can only hope that when the complicated package is completed, the road taken is a clear path to reduced health care costs and not some side road to confusion and refusal to provide reimbursement. Evidently meeting and exceeding the expectations of customers has yet to reach the Medicare process.

To make matters worse, it’s virtually impossible to contact any of the health care industry so-called “customer service centers” by phone to guide you through this process. Let me explain.

Several weeks ago, my wife, Mary, and I were at a local shopping center when I decided to contact one of these customer service centers. I called an 800-number and spoke to a delightful young lady who gave me the address of a center that was in the vicinity of the mall. Asking for the phone number presented the first impasse—I was told that the center doesn’t accept phone calls. Fair enough. Just give me directions from the mall to the service center because I had no idea how to get there. The delightful young lady had no idea on directions so I again asked for the phone number. This presented the second impasse.

I was politely informed that she wasn’t authorized to release the phone number and neither was anyone else in the office. I then asked for a supervisor and was told that a supervisor would call me shortly on my cell phone.

Mary and I then left the mall and went to a local restaurant for lunch. There we received a phone call from a health care supervisor who reminded me that not even supervisors were allowed to release phone numbers of these customer service centers. Being the politically incorrect person I am, I suggested that the governor’s office has a listed phone number, the White House handles calls, and I even have a 13-digit phone number for the Vatican. “Are the people in the customer service center more important than the Pope?” I asked and was given a polite “No,” but still no phone number. “Don’t the people who work in the office receive phone calls from spouses, children, and relatives?” Again the polite answer was, “I can’t answer that.”

Here’s where it gets zany. The supervisor asked me for the address of the restaurant where we were dining. When I inquired about the reason, she stated that she would provide me with Map Quest directions. After getting the address from a curious hostess who wondered why I needed the address of a location where I was already ensconced, I provided it to the supervisor. Sure enough, five minutes later I received a call back. Her opening words were: “First of all take a right hand turn out of the driveway. And there are eleven other instructions I will give you”.

Wouldn’t you think that just giving me the phone number would have avoided all this? My caustic comment stating “Is this what you do as a supervisor—preparing Map Quests for customers” didn’t sit well with her, but frankly I couldn’t blame her based on my condescending air.

I suggested that maybe a phone number could be provided for all these customer service centers in the state with a recording that states: “We do not accept phone calls but here are our hours and we are located between American Way and Customer Drive just north of Quality Street.” She took it under advisement.

When we finally located the office, the people were personable and professional. Guess what? All of them had phones. Go figure!

While I still have a burr in my saddle blanket, let’s discuss the issue of magazine subscription renewals. For years I have religiously renewed my periodicals after receiving a notice in the mail. I just assumed that it was time to renew. Some of the offers were too enticing to pass up, such as “pay for one year and receive the second year free” or “pay for one year and send a complimentary subscription to a friend.” I guess during these renewal times I neglected to thoroughly examine the mailing label to determine the expiration date.

Just recently I performed this tedious task on several publications I subscribe to and what a shock. One subscription doesn’t expire until the year 2012. It might just outlive me! Maybe I should make it part of my will so that I can pass it on to my children. Whatever the case, you can be sure I will be meticulous in reviewing expiration dates in the future before succumbing to another renewal notice. I realize that this is just part of good customer service but receiving a monthly copy of American Girl long after our children have flown the coop is a bit over the top for me.

Then there are restaurants putting cutesy monikers on restroom doors just to confuse us senior citizens. This seems to happen more frequently in themed restaurants. For instance a recent visit to the restroom in a seafood restaurant became an adventure. One door was marked “grouper” while the other was labeled “tilapia.” I opted for the “grouper” and fortunately made the correct choice.

I have been in restaurants in northern Michigan hunting country labeled “buck” and “doe” or “mallard” and “drake” and that doesn’t distress me. Or a country-dance emporium with “gents” and “gals” is fine. But when I’m under some pressure to enter the confines of commode headquarters is it necessary for me to understand the sexes of other species? I sure hope not.

Several months ago, I was at a restaurant that had clearly labeled the restroom doors as “men” and “ladies.” Just to confuse me, the other side of the door facing into the restroom was labeled “ladies.” Maybe some type of magical transformation was to have taken place inside, and for a moment I was discombobulated and looked around to make sure I was in the presence of other males. In any event, as a senior citizen it may be time to circumvent all these mind boggling choices and just bring a supply of Depends. When I’m searching for a restroom I really think that expecting me to take a quiz is unreasonable. The next time I’m in that situation, maybe the health care supervisor I mentioned previously could provide me with Map Quest directions.

I saw something interesting the other day about my favorite airline—Southwest Airlines. It seems the airline took a third-quarter pretax charge of $25 million for an early-retirement program. Here’s what caught my attention: Of the 8,500 employees eligible for retirement, only 606 accepted the offer. Having followed the culture and accomplishments of this airline for many years, I’d like to think that the majority of employees are extremely satisfied with their jobs and decided to stay on. The other option is that the offer was stingy, but until proven otherwise I can’t fathom that. In my estimation it’s still the best managed, most customer-friendly airline in the skies.

That pretty much clears off my back burner. I’m currently reading two new books: The Three Signs of a Miserable Job (Jossey-Bass, 2007), by Patrick Lencioni, and Jacked Up (McGraw-Hill, 2008), by Bill Lane, who was Jack Welch’s speech writer at General Electric for 20 years. The latter book has some interesting comments about why Welch ushered out Gary Wendt, the former head of GE Capital. Suffice it to say that “flatulence at meetings” isn’t an attribute that was high on Welch’s wish list.

Blog Note: This article appears courtesy of the Author. It also appears in Quality Digest.
Copyright © 2006 QCI International. All rights reserved.
Quality Digest can be reached by phone at (530) 893-4095.

About the Author:
William J. Kalmar has extensive business experience, including service with a Fortune 500 bank and the Michigan Quality Council, of which he served as director. He has been a member of the Malcolm Baldrige National Quality Board of Overseers and a Baldrige examiner. He’s also been named quality professional of the year by the Detroit Chapter of ASQP. Now semi retired, he’s a freelance writer for the Detroit News; writes a monthly column for Mature Advisor newspaper; is a mystery shopper for several companies; is a frequent presenter and lecturer; does radio voice-overs; and competes in duathlons.

Consumer Health Interests Are Not Being Served by the Health Insurance Companies

by Thomas Hinton

Every week, it seems like there's another news story in the newspaper, or on the television, about the plight of someone who has been denied vital medical care. I'm talking about American citizens who have health insurance and pay their bills.

Let's review the case of Scott "Scotty" Eveland, a 17-year old senior at Mission Hills High School in Oceanside, California, who was severely injured and paralyzed while playing for his high school football team last fall. While Scotty is making a slow recovery, doctors who are treating him at a San Diego County hospital, are cautiously optimistic about his progress and recommended to Blue Cross of California that he remain at their facility to receive daily physical therapy.

But, Blue Cross of California decided Scotty's care was costing too much money and ordered him moved to another facility. Despite the protests of Scotty's doctors, family, and the Oceanside community, Blue Cross of California refused to change its ruling. The family appealed the health insurer's decision but lost. The have made a final appeal to California state regulators who can -- and should -- overrule Blue Cross of California.

Blue Cross of California noted in its decision that similar care was available at a lower cost, non-medical facility. The family and physicians tending to Scotty strongly disagree. Something tells me they know best since they are involved in his recovery and care every day.

Given this scenario and the gut-wrenching experiences people and patients must suffer through, I must ask the ultimate question: Why is it that health insurers like Blue Cross of California serve as both judge and jury in these matters?

Something is fundamentally wrong here with the health care system and how it is managed. For two years, the American Consumer Council -- along with other consumer-oriented organizations and government agencies -- have rallied against the health care management establishment to challenge the injustices and unfair practices of companies like CIGNA and Blue Cross of California who serve as both judge and jury. In essence, claimants pay their insurance premiums and then, if it suits the whims and financial goals of the health insurers, they decide whether or not people like Scotty recover or remain in a vegetative state. As harsh as it sounds, that's what medical directors and other so-called "health care professionals" are deciding every day. It's a sham!

Is it possible that medical directors, who once swore allegiance to uphold the best care of their patients when taking the Hippocratic Oath (an oath traditionally taken by physicians pertaining to the ethical practice of medicine), have been bought-off by health insurers and compromised in their ability to make unbiased decisions? I think so. How else does one explain their decisions to deny care? Certainly, these men and women are intelligent people. But, it appears they've lost their ability to act rationally and in the best interest of their patient-claimants in order to save their employers a few thousand dollars! Yes, it's really money, but, it's also about the dignity of human life!

When you read the Hippocratic Oath, which dates back to the Fourth Century, and is attributed to the father of medicine, it states unequivocally what is expected of a physician. This includes the medical directors of health insurers who also took this oath:

1. To teach medicine to the sons of my teacher.
   
2. To practice and prescribe to the best of my ability for the good of my patients, and to try to avoid harming them.
   
3. Never to do deliberate harm to anyone for anyone else's interest.
   
4. To avoid violating the morals of my community. (Many licensing agencies will revoke a physician's license for offending the morals of the community).
   
5. To avoid attempting to do things that other specialists can do better.
   
6. To keep the good of the patient as the highest priority.
   
7. To avoid sexual relationships or other inappropriate entanglements with patients and families.
   
   

Clearly, sections 2, 3, and 4 appear to be in question with the continuing care and treatment decisions of certain medical directors of health insurers. This raises some interesting legal questions that consumer groups are exploring. For example, if the "Community" were to sue a health insurer's medical director (or other licensed medical personnel), and a jury found that individual to be guilty of violating their Hippocratic Oath, could the guilty medical director be suspended from practice?

Perhaps it's time for community leaders and families of patients to raise the stakes and organize major boycotts and protests at these companies so that legislators will take action to fix a broken system.

While many health care proposals have been put forward -- including an impractical proposal by Governor Schwarzenegger of California to require all Californians to purchase health insurance -- the ultimate answer, we believe, is for the federal government to adopt a universal health system that provides primary and urgent care for all citizens. Such a plan was introduced by the American Consumer Council and can be viewed at: www.americanconsumercouncil.org

In the final analysis, there must be a national health care program that eliminates health insurers and removes life-and-death decisions from the hands of people who have been compromised in their ability to make unbiased decisions because their allegiance is not to the patient, but rather, a for-profit company that mostly cares about making a profit and not improving the health of the patient.

About the Author. Thomas Hinton is the president of the American Consumer Council and can be reached at tom@americanconsumercouncil.org