Getting Detroit Back 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

Drinking the Poisoned Cool-Aid of American Politics

by Tom Hinton

My father used to remind his children to avoid conversations on politics and religion. “Stick to the weather,” he admonished us. “You’re not going to change somebody’s political or religious beliefs in a ten minute conversation. You’ll only alienate them.” It's sound advice if only I could follow it.

But, in this season of presidential politics, emotions run hot. It’s hard to bite my lip and not express an opinion. Recently, I had a few unpleasant exchanges with my sister about the 2008 presidential election. She’s a staunch Republican and thinks American will collapse if John McCain and Sarah Palin are not victorious in November. I’m also a registered Republican who thinks the Bush-Cheney Administration has been an unmitigated disaster and already caused serious economic havoc around the world. I’m supporting Barack Obama in the hopes that the Democrats will get America back on the right track. After several heated exchanges, nothing had changed. She likes McCain and I want a new direction. We agreed to disagree. Dad was right.

But, the most disturbing aspect of these election conversations I’ve had with those who espouse the far-Right Republican position is their extreme views and outrageous allegations about Senator Obama and the Democrats. For example, my sister is an educated, middle-class woman who truly believes that our current economic demise has been caused by a conspiracy. The conspirators are ACORN, a non-profit organization that advocates voter rights and voting registration, and Senator Barack Obama. She also believes that, if elected, Obama will undermine America’s national security by siding with the terrorists given his Arab background and pro-Muslim (and, therefore, anti-Christian) beliefs. I was dumbfounded to hear my sister espouse these views. How could she believe such drivel?

Of course, nothing could be further from the truth. Obama is a Christian and his ethnic roots are in Kenya and Kansas. Obama is the son of a white Kansas woman and a black African who came to the United States from Kenya, Africa. Like John McCain and Joe Biden, Obama is a United States Senator. Obama is also a Harvard graduate, a veteran of Chicago politics, long-time Illinois resident, married to a talented lawyer, and they have two young daughters. You don’t get much more American than that!

So, where do people like my sister come up with these warped beliefs that are based on such outrageous innuendos, outright lies, and destructive rumors? I asked her where she got her information and she told me that she listened religiously to Fox News as well as two radio shows hosted by Rush Limbaugh and Michael Savage. Since I wasn't really tuned in to these media programs, I decided that for two weeks I would conduct a personal experiment to find out if these media sources were poisoning the well from which conservative American voters like my sister get their information.

Regrettably, I discovered that Fox News and the radio personalities she listens to are not only fueling the fires of hatred and divisiveness among Americans with their vitriolic, biased rantings, but they are the spring source from which many of the lies, fabrications, innuendos, and misstatements about Senator Obama originate. During my two week listening experiment, I made note of the various comments and statements that sounded dubious or false made by the Fox News anchors and reporters as well as Mr. Limbaugh and Mr. Savage. I did not keep track of the exaggerated opinions of the many pundits and guests who appeared on these various programs. In a two-week timespan, I counted more than 362 comments that were either blatantly false or grossly misleading including repeated claims that Obama was a Muslim, Arab, or he supported terrorists. This included two terrorist-related remarks during interviews with the Republican vice presidential candidate Sarah Palin and two anti-American remarks about Obama from a Republican congresswoman who represented St. Cloud, Minnesota. In none of those cases did the reporter conducting the interview try to correct these candidates' gross misstatements.

I was so disgusted with the slanted reporting that these media outlets practiced that it moved me to write this article and raise the question, Why? Why do people who call themselves journalists and are entrusted with reporting the news or advocate a certain political philosophy resort to lies, fabrications, innuendos, and misstatements to make their case? Is it not enough to merely say to their viewers that they disagree with Obama and the Democrats and build their argument on the facts? Why must they spew such toxic and hateful messages? This is wrong and a gross disservice to the ethics and values upon which America was founded. Americans should stand-up and say “enough!” Perhaps, they will as they vote on Election Day.

When those who are entrusted with reporting the news and offering their views on presidential politics and national elections resort to poisoning the well from which voters must drink to quench their thirst for information and facts in order to make an educated decision to elect the next president of the United States, a terrible disservice is done. Certainly, everybody is entitled to their opinion and even a fool has the right to espouse their beliefs in America. But, when professional commentators, reporters, and radio personalities spew a message of divisiveness and hatred by knowingly fanning the political flames with their lies and misrepresentations, they have lost their right to be called professionals let alone journalists. They have reduced themselves to overpaid entertainers and jokers, and poor ones at that!

I subscribe to the belief that in American politics both parties embrace a core philosophy and their standard-bearers typically reflect the views of their party. I also think it’s important from time to time to shake-up the Congress and White House just to keep everyone in-line. I have never been one to simply vote the party slate. Blind allegiance is unhealthy. I think political balance is good. Democrats and Republicans as well as other political parties offer American voters an important choice, and choice is essential to preserving any democracy.

Finally, while conducting my fair-and-balanced media experiment over the past two weeks, I decided to re-read the Declaration of Independence and the Constitution of the United States of America. Since manyreporters and pundits were critical of Governor Sarah Palin’s inept response to an elementary question regarding the job of the vice president, I decided to review these two documents. These are amazing works by our Founding Fathers. Anyone who wants clarity about the vision, values, and mechanics of America's experiment with democracy should read these masterpieces. I also encourage you to read them to your teen-agers so they understand why the United States of America was established and what we truly stand for. I think too many Americans, especially in the fringe media, have forgotten these principles and could benefit from a refresher course.

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

by Tom Hinton

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 Issues

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: Tom 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: Tom Hinton serves on the Board of Directors of the American Consumer Council administers ACC’s Green C Certification Program. He can be reached in San Diego, California at tom@tomhinton.com

Lufthansa Airline is Customer-Focused

by Tom Hinton

Recently, I flew Lufthansa Airlines round-trip between Los Angeles to Frankfurt. While I have traveled internationally many times, this was my first international experience with Lufthansa. Given the mediocre in-flight service I’ve received from various U.S. carriers in both coach and business class, I must confess my expectations for Lufthansa were not very high. Boy, was I surprised! Not only were the Lufthansa airport representatives and in-flight personnel exceptional, their courteous service in both coach and business class exceeded my expectations.

While courtesy, kindness, and in-flight comfort aren’t rocket science, very few airlines have mastered these simple pillars of superior customer service. It’s too bad because studies show that good service breeds customer loyalty. Lufthansa understands this simple equation because Lufthansa has analyzed its’ in-flight customer experience and determined how to make a ten hour flight a pleasant experience instead of agony and torture like many of their competitors.

I realize there are certain costs associated with providing passengers warm hand towels, a free glass of wine, complimentary newspapers and magazines, and in-flight entertainment programs including two movies. But, these simple in-flight niceties demonstrate that Lufthansa has moved beyond the “bean counter mentality” and makes operational decisions using a higher principle. That principle, namely, is customer satisfaction! Lufthansa has figured out that customer loyalty generates repeat business and repeat business is money in the bank!

While there’s still (leg) room for improvement -- especially in terms of the leg room and hobbit-sized seats most airlines use in coach class -- I think Lufthansa earns kudos for its exceptional service and challenging its airline competitors to raise the customer service bar! I look forward to my next exceptional experience on Lufthansa!

About the Author: Thomas Hinton is a popular business speaker on the topics of Leadership, Sustainability, Customer Service, and Teamwork. He can be reached at tom@tomhinton.com