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

New Year's Resolutions for Everyone Except Me!

by Bill Kalmar

Now that I have your attention, let me explain. This year I will enter a very special age group, namely, those people eligible for Medicare. The magical age of 65 provides one with certain mystical rights—Medicare benefits, of course, which means we’ll be swimming in extra disposable income. Yeah, right! And how about another increase in social security benefits without having to endure a performance review! And most importantly, the removal of all vestiges of political correctness, as if that ever encumbered me!

An added benefit is moving into the 65–69 age group for competing in sporting events or, as it’s sometimes referred to as “65 to death.” For those of you who may be runners you know that I will now be the youngest in a group of runners vying for prizes given only to the first three finishers in each age group. Not that this makes for a significant advantage because in my last 10K (6.2 mi) race, I was roundly beaten by a 72-year-old. I wonder if he passed the drug test.

In any event, I no longer have to make any New Year’s resolutions because changes to my lifestyle at this juncture could be injurious to my health, well being, and mental acuity. For me to make any personal resolutions would be a waste of time and thus I’m making them for all of you. Just chalk it up to senility.

Here’s what I’m proposing for 2008:

• I resolve that all wait staff in restaurants pay attention to me while taking my order and quit looking around to view other activities that may be going on in the restaurant. If I’m not the center of attention then perhaps my waiter should extract the tip for my meal from the people he or she is so attracted to. Is it too much to ask that the wait staff at least appear to be focused and interested in providing me with exceptional customer service?

• Speaking of restaurants, I resolve that all establishments serving food leave the hot water valve on in the restrooms. How many times have you encountered a restroom sink that only has cold water? I have a confession to make in that regard. On a regular basis when I discover a lack of hot water, I instinctively reach under the sink and turn on the hot water valve, which inexplicably has been turned off. On some occasions, I have even used my handy Swiss Army knife to override the system. How the wait staff washes their hands with cold water is beyond me. So next time you visit a restroom at McDonalds, Wendy’s, or Burger King and the water is hot, you have me to thank for it.

• I resolve that all phone calls I make in 2008 don’t contain the message: “For quality purposes this call may be recorded or monitored by a supervisor.” Do we really believe that someone is hired specifically to listen to phone calls all day? At one point in my career I managed a customer service telephone area and we found it just as effective by practicing “management by walking around” and overhearing the representatives rather then listening to reams of recorded messages at day-end. If there is to be a phone message I recommend that it be: “For truth of disclosure purposes, this call is not being monitored because we’re tired of fooling you to make you think that it is.”

• I resolve that when executives are released from an organization the words “Leaving to devote more time to other activities and family” be fully explained. What are those other activities and what does his or her family have to say about the executive's sudden arrival on the home scene? Is the family happy and content or would they rather the executive just focus on those “other activities.” Just when you thought you have heard all the reasons for someone to depart an organization try this from global chief growth officer Thomas Hernquist who spearheaded Hershey Co.’s premium and dark chocolate portfolios and who resigned from the company effective December 31. Hernquist said he intends to work on ventures that “leverage strategic consumer insights.” Wow! That is just too cerebral for my soon to be 65 year old brain! Why couldn’t he have just said that he was pursuing other activities? Or my favorite: “Leaving so I can function in a jerk-free environment.”

• I resolve that the words “merger of equals” and “synergy” be banned from business jargon forever. We all know that there is no such thing as a merger of equals—Daimler-Chrysler certainly proved that. In a merger there is always one dominant party and thus synergy means “We will look for ways to combine our processes but ultimately we bought your company so our processes will be used.” If that sounds cynical on my part, I think it’s also realistic. I, along with many of you, have been through mergers and frankly none have been pleasant. So for 2008 let’s substitute the words “Full court press take no prisoners buy-out” for “merger of equals.”

• I resolve that when organizations release staff because of the company’s desire to “go in a different direction” that new “direction” or strategy should be spelled out to the remaining staff and the shareholders. What if the new direction is contrary to the expectations of those who will now have to implement it?

• I resolve that all meetings start and end on time. In that regard, let me share with you the thoughts of two captains of industry on being punctual. First, Bob Iger, President and CEO of Walt Disney:“Meetings need to start on time. I’m zealous about that because my day needs to be managed like clockwork. If people are late for meetings, the meetings tend to go late, which throws off my agenda thereafter. I frequently start the meeting even if all the people expected to be in attendance aren’t there. I don’t need to say to people, ‘Be on time’, they know.”

And this from Simon Cooper, president and chief operating officer of the Ritz-Carlton Hotel Co.: “I’ve always believed that if you’re late, it says something about the lack of value you have for other people’s time. Being on time for all meetings is the best use of time in the workplace. I hope I’ve instilled that in my staff. I certainly embarrass them if they’re not.” That pretty much sums it up for me. One other comment and that is at the end of a meeting if someone leaves without an assignment that person wasn’t needed at the meeting and shouldn’t be invited back for subsequent meetings on the same topic.

• I resolve that all establishments that imprint a survey request on receipts provide me with on the spot reimbursement for completing the survey. Over the years I have completed surveys for every department store, coffee shop, bagel store, and sundry other establishments without benefit of a thank you. Sure the receipt indicates that I have been entered into a drawing for $5,000 but I doubt it. Just the other day I asked the Barista at a local coffee shop if he was aware of anyone who had ever won a cash prize by completing a survey and of course the answer was a resounding “No.” So from now on, I want a free coffee or bagel for completing the form.

Well, those are just some of the resolutions for all of you for 2008. If I sound like the fictional deranged character Howard Beale from the movie Network when he said, “I’m as mad as hell, and I’m not going to take it anymore,” so be it. At my age I think I’ve earned it and, yes, I am feeling a bit deranged from service expectations not being to my liking especially when it comes to hot tap water in restrooms. Does Medicare cover my idiosyncrasies?

Just so you don’t think that I’m bonkers, I want to make one resolution of my own. That is that you the readers of QualityInsider continue to invite me into your offices and homes for another year. I thoroughly enjoy the relationship with the experienced and professional staff of the publication and how they make me look so good each month. I also resolve to provide you with some thoughts on quality and customer service and other pertinent topics that hopefully you will find interesting, informative, and perhaps even humorous.

Now time to retreat into my ice-covered hammock. If some of my resolutions have left you perplexed and troubled just keep in mind the words of comedian Joey Adams when he uttered: “May all your troubles last as long as your New Year’s resolutions.”

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.

Grounded: What to Do About the Airline Abuse of Passengers

Grounded: What to Do About the Airline Abuse of Passengers

by Tom Hinton

Valentine’s Day 2007 was anything but a sweetheart experience for several hundred airline travelers who had the misfortune of boarding JetBlue flights only to be stranded on the tarmac at New York’s John F. Kennedy International Airport for more than six hours. A severe winter storm hit the northeast region and caused havoc for the popular, discount airline. JetBlue cancelled more than 250 flights and approximately 10 flights were significantly delayed at JFK with customers on board. These flights were a combination of scheduled departures from JFK and arrivals that were unable to move to a gate due to all gates being occupied.

This latest weather-related episode comes on the heels of a similar debacle two months earlier when American Airlines allowed passengers aboard a flight to sit for eight hours on a tarmac in Austin and wait-out thunderstorms over Dallas. On that same day, there were 67 other American Airline flights that idled for over three hours awaiting weather clearance. In 1999, Northwest Airlines allowed an inbound flight from the Caribbean that had been delayed 22 hours, to sit on a snowy Detroit tarmac for eight more hours.

According to the Air Transport Association (ATA), the air-carriers’ trade group, such delays are isolated incidents. But, when you examine the most recent delayed flights statistics from the U.S. Department of Transportation, it appears the airlines are operating with a broken process. I believe this issue is more serious that simply bad weather conditions that force the airlines to improvise. According to the Department of Transportation, in 2006 some 36 domestic flights were subjected to waits of more than five hours before taking off; and, 60,000 flights were subjected to tarmac waits of up to two hours after leaving their gates. What are the airlines doing to correct the situation that has caused this latest uproar among the traveling public? The unfortunate answer is not much.

The ATA contends that the problem was fixed in 2000 when it promised to voluntarily regulate its members through a 12-point customer service agreement that encouraged its airline-members to embrace guidelines to meet passengers’ essential needs during long on-aircraft delays. Interestingly, however, when a member airline fails to honor its end of the industry agreement, there are no repercussions other than the negative press and ill-will the airline suffers from disgruntled passengers. JetBlue has been feeling that pain all week long.

It is also interesting to note that Senators John McCain and Ron Wyden proposed legislation shortly after the 1999 fiasco with Northwest Airlines. The draft legislation would have forced airlines to treat their passengers better. But, the ATA derailed this congressional action through its powerful lobby and the bill sponsors caved-in by accepting the ATA’s meaningless 12-point customer service agreement.

Now, a more consumer-friendly Congress led by feisty Senators Daniel Inouye and Barbara Boxer are planning to revisit this untenable situation by holding hearings on JetBlue’s misstep and, possibly, propose long-overdue legislation to give airline passengers meaningful protection against further airline abuses. Such legislation cannot happen soon enough given the dismal track record of airlines in such weather-related situations. New legislation would also strengthen the U.S. Department of Transportation’s ability to penalize airlines for future mishaps and put teeth in regulations that deal with on-aircraft delays and other passenger abuses such as lost luggage and missed connections that are deemed the fault of the airlines.

Hopefully, any congressional hearings also will determine why airlines consistently make bad decisions when considering the welfare of passengers amid weather delays. As one of those frequent flyers who once sat on a tarmac at JFK Airport for over four hours waiting for a second de-icing of our jet before we could take off, I would like to recommend three issues Congress should carefully examine when it holds hearings to address this untenable situation:

1. Airline Greed.
Basic economics tells us that when an airplane doesn’t fly, it doesn’t generate any revenue for the airline. So, it’s in the financial interest of airline management to get their planes boarded and in the air. Of course, that’s assuming there’s not an ice storm blanketing the region. If anyone at JetBlue had bothered to step into the passenger terminal at New York’s JFK International Airport and read the arrival-departure screens, they would have noted that many other airlines were canceling their flights in and out of the northeast. Certainly, the management team at JetBlue watches the Weather Channel! Predicting the weather might be a science, but reacting to a snow storm that is already dumping ice and snow on the airport doesn’t require much more than common sense. JetBlue could have read the Farmer’s Almanac and learned the same forecast two weeks in advance! Of course, when airline greed is the primary motivator, management is often blind to the obvious.

Why was it that savvy Southwest Airlines canceled many of its flights as early as Tuesday afternoon, February 13, the day before the storm socked the northeast? I think Southwest Airlines and other air carriers that took pre-emptive steps to cancel flights deserve kudos for demonstrating their concern for customers and placing the welfare of their passengers ahead of potential revenues. JetBlue reportedly suffered losses of $7 million as a result of canceling nearly 250 flights affecting some 10,000 passengers over three days. Certainly, canceling ten more flights – that is, those flights that sat for six hours on JFK’s tarmac -- would not have broke the bank. But, the damage JetBlue’s image and brand will suffer as a result of their decision to get those airplanes in the air will likely cost JetBlue an estimated $25 million in lost customers who have had enough and no longer trust JetBlue. So much for trying to make a buck!

2. Bad Judgment by Management:
There’s an old axiom that says, ‘You can’t fix stupid.’ In the case of airlines that force passengers to wait on a crowded airplane on a dark tarmac for hours at a time before deciding to cancel their flight and return them to the gate suggests either ineptness or stupidity. What were these guys thinking? Despite the mea culpa by JetBlue’s CEO David Neeleman, his tony airline has suffered an ugly black eye. Trying to buy back disgruntled passengers’ loyalty with apologies and promises of free tickets just doesn’t cut it. JetBlue needs to take a bold, third step in terms of its customer recovery efforts and that bold step is to take the lead in championing a Passengers Bill-of-Rights through Congress. Such action will help restore JetBlue’s image and credibility among the flying public. What JetBlue proposed on February 22 in response to the call for a Passengers Bill-of-Rights doesn't go far enough. JetBlue is suggesting that a five hour delay is still tolerable. It is not.

Most passengers understand reasonable travel delays. We’ve tolerated the security screenings and the loss of our liquids and gels that exceed three ounces in order to get past the airport security checkpoints. But, JetBlue’s 30 million passengers will not tolerate bad management decisions. Passengers are people, not cattle. Did anyone among JetBlue’s management think to get rolling stairs out to those planes to disembark stranded passengers? And, what were the pilots thinking? Ultimately, the pilots should have taken charge of these chaotic situations and used their common sense in the cockpit. In the end, JetBlue only created a public relations disaster for which it will pay a hefty price. Passengers have many choices when it comes to flying; and, in this era of tough competition, JetBlue’s bad management decisions will certainly cost it dearly in terms of lost revenue and passenger disaffection.

3. Fix the Broken Process:
While the ATA and many of its members want to maintain the status quo by allowing the airlines to fix this problem, a better long-term solution must be considered. To date, the airline industry has not fairly represented the concerns of paying passengers who keep their member airlines aloft in the not-so-friendly skies.

Perhaps, a good first step would be for the airlines and its trade industry to acknowledge that the current process for handling weather-related delays is broken. And, since the airline industry is unwilling to truly fix the problem, legislation should be approved quickly by the Congress that sets forth strict guidelines for weather–related delays and imposes financial penalties on airlines that mistreat or abuse passengers.

Since the airlines cannot agree on a definition of ‘passenger torture,’ let me offer a definition. When there is a tarmac delay beyond two hours for any reason – weather or mechanical-related – passengers should be given the option to disembark. Beyond two hours, it is torture for passengers who are apt to lose their cool, get angry, and even threaten the safety of the flight crew. I know. I was aboard a weather-delayed flight for four hours and experienced a near-passenger revolt one snowy, December afternoon at JFK Airport.

The airline industry will argue that such measures are too costly and will only further encumber an already dysfunctional airline hub system. So be it. Has the airline industry become so smug as to forget who the paying customers are? Isn’t it time that the airlines start treating their customers with some degree of dignity and respect? It’s bad enough that service performance aboard the airlines have dropped off the radar screen. Passengers shouldn’t have to suffer additional anguish because the airlines can’t figure out what to do with them when extensive weather-related delays hit an airport.

If this was simply a case of flying cargo across the country, nobody would be screaming mad. But, when human beings are factored into the equation, the airlines need to think and perform differently. Unfortunately, it appears that too many airline executives have become callous in the ways of running a business and lost site of the fact that passengers are human beings. And, passengers will vote not only with their pocketbooks, but they will organize and fight back when they’ve had enough. I believe I hear a rallying cry. The trumpet calls from angry passengers are blaring in the distance and the airlines had better heed the warning if they don’t want a full-scale passenger revolt led by consumer champions Senators Daniel Inouye and Barbara Boxer on their hands.

Frankly, I think an airline passenger revolt is long-overdue. We’ve suffered enough. We’ve tolerated an inept hub system. We’ve sat squished together like sardines in those flying aluminum tubes. We’ve lost our appetites due to the slosh airlines consider food; and, we’ve been subjected to monotone in-flight announcements ad nausea. It’s time for Congress to get tough with the airlines and approve a passenger bill-of-rights to protect the flying public since the airline industry will not.

And, while Congress is at it, could they please do something to shorten those ridiculous in-flight announcements passengers are forced to listen to before departure? Any adult who doesn’t know how to fasten a seat belt probably should take the train.