When to fire your clients

In many services businesses and certainly in the Recruitment and Staffing business, the customers you choose determine the level of success you achieve. In the search business we are always looking to add clients who are responsive to our efforts (we only get paid if we are successful) and in the temporary staffing business we are always looking to add clients who pay their bills on time and treat our temporary employees well.

A post on the HBS blog titled "The New Math of Customer Relationships" by Harvard Business School professor emeritus Jim Heskett articulates this better than I can:

When we observed a number of organizations ... we found a common behavior among the most successful ones. In various ways, they "fired" customers who either were abusive in their relationships with employees or were just difficult to serve, perhaps because they fell outside the core constituency (target market) identified in the organizations' strategies. In some organizations, this is a way of expressing support for employees. In others, it is a way of preserving the organization's strategic focus. This is typically not something that an organization advertises. But it is standard practice in a number of organizations today.

For example, at ING DIRECT, the fastest-growing financial services organization in the United States over the past seven years, the company, in as personal and amiable a way as possible, asks 10,000 customers to close their accounts every month. It's important to point out that this is out of a current base of about 6.5 million customers who give ING DIRECT the highest marks for satisfaction out of all U.S. banking organizations. The company fires customers who are especially "high maintenance" because they are unusually high users of the time of its support center personnel. This both preserves a low-cost base for its targeted customer base and, by the way, reduces a source of frustration for employees.

Do you agree with this concept? I do... The assumption being that your business does not depend on a small number of clients. If it does, you probably don't agree and/or regardless if you do, you can't consider this strategy until you land some more clients. So sell more so you can fire your clients too.

Companies, Employees, and Social Media requires Trust

Jeremiah Owyang's post raises issues for many businesses.

"In this new world, where Social Media is going to be part of many of our communication fabrics, we need to establish trust, as the lines are never going to be fully black and white"

Many businesses try to build processes that remove trust from the equation. I hear examples everyday. My best friend works for a company that blocks employee access to personal email accounts and I speak with people in our industry each week who work for companies where managers hoard information for fear of an employee gaining some "secret" and leaving to become a competitor.

For Bond, our employees, clients and candidates are all sharing the same social media space on Facebook, Linked In, My space etc...and Jeremiah has hit a bulls eye as it relates to our strategy for achieving our organizations objectives. He writes:

"As a result, trust has become more and more important, and we need to consider the following (as it’s not going away)

1) Companies: Hire the right employees that have integrity, sound business judgment, and know how to communicate both internally and externally
2) Companies: Trust in these employees to be your ambassadors to the world, give them the benefit of the doubt, and let them self-correct amongst themselves...
3) Employees: Those out in the social sphere should act their best, demonstrate your ability, and try not to embarrass the company. If you do make a mistake, quickly apologize, correct the mistake. Always act in an ethical manner."

The culture of an organization is defined by it's people (at every level). This fact has never before been more significant. In consideration of this, I am motivated to enhance our ability to communicate the characteristics at our foundation.

For me to want to come to work everyday I need to work with people who share a dedication to integrity, excellence in service, desire for knowledge, openness for innovation and take pride in their ethics. Our challenge is to maintain our culture while we grow. If we are timely in our ability to identify and rectify issues that threaten our values then we will be in a better place, if not, then we will have aspirations that are not achieved.

What kind of word-of-mouth advertising drives sales?

— Martha Lagace writes on the HBS blog:

"According to new research by HBS professor David Godes and Yale colleague Dina Mayzlin, word of mouth that is most effective at moving sales forward "is created by less loyal customers, not loyals, and occurs between acquaintances (not friends)." As for whose opinions most make a difference, the researchers found a wrinkle in the common wisdom that opinion leaders are what count. While it is true that opinion leaders carry great weight among very loyal customers, their word of mouth may be less influential among the less loyals. Rather, a wide social network may be the key. Godes and Mayzlin describe more in their article "Firm-Created Word-of-Mouth Communication: Evidence from a Field Test," forthcoming in Management Science."

No surprises here. What has changed over the past few years is the ease with which you can maintain substantive acquaintances. Some of the most successful people I know were successful at building a tremendous social network before email, myspace, friendster, facebook and linkedin. Today's tools suggest the playing field has been levelled and the social skills required to build a successful network have been dimunized by technology. If you can't do it now then you should find a profession that does not require relationship building and social networking skills. But a true differentiator between mediocre and exceptional performance in business is still and will continue to be tied to your willingness to pick up the phone and your ability connect directly with someone. More importantly, to inspire someone that is not already a friend or acquaintance to meet with you. My partner would call this "old fashioned sales skills".

Bond's 08' business- why i am optimistic:

You can't miss the gloomy economic news. But that does not mean you can't have a great 08'. As each week goes by, I'm gaining confidence that this will be Bond's most successful year. Of the decisions you make s a manager, the most impactful are your hiring decisions. Certainly, a prudent strategy that recognizes your market's strengths and weaknesses is required but most significant to me is building a strong foundation around great people. We have great people at many levels of our organization. If your team enrolls in the plan and shares a level of commitment, professionalism, passion and dedication to the organization then your company will outperform the baseline in any economy and you should feel good about your chances for success.

In 2 1/2 years we have become a team of 30+ and I can't imagine feeling better about it. We have been able to do this while growing a great group of established and fast growing clients and developing our business processes on the go - something that can easily doom a fast growing start up company. We have also overcome some cancerous bad hires and emerged stronger and closer.

I find myself roaming our office feeling a contagious buzz of positive energy in our practice groups. If you are working in a venture funded early stage start up you may say "big deal" - but we are home grown company in a mature industry that is rarely associated with the traits I mentioned above. Big props go out to our leadership team that is setting a great tone, pace and example for their respective teams. People at all levels of our organization are stepping up outside of their individual responsibilities.

Props this week to Justin Kim who rocked the development of our new live job post tool and our company Facebook page. He took the initiative to make change happen for the entire company. This is one of many examples I experienced this week of people going the distance for the team. The team's mutual commitment to each other is vital to the success of your organization. Our team is constantly reaffirming that level of commitment and that is why I am optimistic.

I could keep going but I think I made my point. Service or Product - the individuals commitment to the organization can overcome a few bad hires, growing pains and a turbulent economy so.... don't settle.