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Sharing Financials Helps Employees Make Smarter Decisions December 31, 2014

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Frontline employees are responsible for keeping customers happy. But when people focus on delivering great customer service, they can forget that the business has to make money too.

Should I schedule yet another service visit? Should I forgive this bounced-check fee? Should I honor that expired warranty?

If you’re going to ask frontline workers to make these difficult decisions, teach them about key financial indicators so they’ll know the costs. Think about creating a daily or weekly dashboard showing relevant customer-feedback scores and comments, along with key financial numbers – variance to budget, cost per customer, etc. Employees will learn to track the short-term tradeoffs and will naturally try to keep costs under control. This can also help in the long term. If they schedule extra service visits, for example, or regularly honor those expired warrantees, the costs of service may rise. But there will be a payoff in greater customer loyalty.

Cities band together to form New Century Cities venture to ensure broadband to their constituents October 23, 2014

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Next Century Cities, an initiative billing itself as a bipartisan effort “dedicated to ensuring the availability of next-generation broadband Internet for all communities,” launched Monday with 32 cities on board.

The coalition is banding together after two cities – Chattanooga, Tenn., and Wilson, N.C., issued requests to the FCC to preempt state laws restricting their ability to provide broadband service. FCC chairman Tom Wheeler has signaled that he wants to use the FCC’s power to prempt what he believes are efforts by incumbent ISPs to block municipal broadband via advocating for those restrictive state laws. In response, a group of dozen Republican senators expressed concerns about Wheeler’s plan, holding that it’s a state’s rights issue.

Next Century Cities, launched Monday at an event in Santa Monica that included a video message from Wheeler, said its partnership cities and their elected leaders are coming together to “recognize the importance of leveraging gigabit-level Internet to attract new businesses and create jobs, improve health care and education, and connect residents to new opportunities.”

Next Century Cities said it will engage with and assist communities in developing and deploying next-generation broadband Internet, with participating cities agreeing to share information on what works and what does not.

Next Century Cities, set up as a project of New Venture Fund, a 501(c)(3) public charity, notes on its Web site that it is supported by a group of donors that includes the Ford Foundation, the John S. and James L. Knight Foundation, the Open Society Foundations, and Google.

Next Century Cities on Monday announced the following 32 cities as inaugural partners: -Ammon, Idaho -Auburn, Ind. -Austin, Texas -Boston, Mass. -Centennial, Colo. -Champaign, Ill. -Chattanooga, Tenn. -Clarksville, Tenn. – Jackson, Tenn. -Kansas City, Kan. -Kansas City, Mo. -Lafayette, La. -Lexington, Ky. -Leverett, Mass. -Louisville, Ky. -Montrose, Colo. -Morristown, Tenn. -Mount Vernon, Wash. -Palo Alto, Calif. -Ponca City, Okla. -Portland, Ore. -Raleigh, N.C. -Rockport, Maine -San Antonio, Texas -Sandy, Ore. -Santa Cruz County, Calif. -Santa Monica, Calif. -South Portland, Maine -Urbana, Ill. -Westminster, Md. -Wilson, N.C. -Winthrop, Minn. –

This approach looks like not just a logical next step but almost a necessity, with many incumbent’s recognizing the increased bandwidth usage of their customers and seizing the opportunity to raise rates and lower usage limits. I believe this initiative has the best interests of the cities and the voters at heart, republican’s had best listen to their constituents.

 

Joe Buck, NCE

Define Roles on Your Next Project October 20, 2014

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So you’ve  pulled together a winning team, and you’ve set timely and manageable team project goals. Now you need to establish the roles that each member will play. Not having this conversation can lead to confusion, multiple people trying to jump on the same task, turf battles, etc. Avoid this headache by explicitly laying out who will do what – and define what it means to succeed in each role. You need:

  • A project manager to set a timeline and hold members accountable.
  • Subject matter specialists to organize and lead larger portions of the project, like doing research or analysis.
  • The PM should record all key decisions and document team progress.
  • The PM should inform stakeholders (clients, boss, customers) about team activities – and share stakeholder thoughts with the team.

 

I feel certain I have left out a few other highlights however following the above guideline will ensure a successful on-time project implementation.

 

Joe Buck, NCE

Open-book management July 21, 2014

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The phrase “open-book management” was coined by the writer John Case in a 1989 story for Inc. But the most visible advocate for the concept—sometimes known as the godfather of open-book—is a man named Jack Stack. Stack bought a troubled engine remanufacturing plant in Missouri in 1983 and soon realized it would fail if he didn’t make some radical changes. Case describes the transformation in his book, Open-Book Management:

The only way to survive, Stack decided, was to make sure everyone in the whole plant, all 119 employees, knew exactly how iffy things were. He began distributing the income statements, along with the various operational and budget numbers that made the income move one way or the other. He taught the managers and supervisors how to read the financials. They, in turn, gave an abbreviated course to hourly employees.

Everyone became aware of which departments and processes gained or lost money for the company and how their precise roles contributed to (or detracted from) income. They could see where waste—even small, forgettable kinds of wasteful behavior like frittering away office supplies—hurt the bottom line. Workers didn’t need to quietly speculate about how much money was going to the ownership group, since the numbers were right there.

At the same time, Stack introduced bonuses dependent on moving those numbers. There was an employee stock ownership plan, so everyone had a stake. The entire staff was motivated to work in concert to hit goals, as they would all benefit from the successes.

By 1992, annual revenues at Springfield ReManufacturing Corp. had gone from $16 million to $83 million. The company’s value had grown from $100,000 to $25 million. By 2013, the stock had risen from 10 cents a share to $348, and the original hourly workers owned, on average, stock worth more than $400,000.

The entrepreneurial Stack bottled his insight and labeled his philosophy the “Great Game of Business.” The metaphor refers to the notion that every employee can see the scoreboard (meaning the financial statements), they’re all on the same team, they all benefit from winning, and the process is fun. Stack continues to give lectures based on his story and holds regular conferences for managers and owners who hope to inject these concepts into their own workplaces. In Springfield alone, where SRC’s success was impossible for neighboring organizations to ignore, open-book techniques were adopted by a car dealership, a cleaning service, and even the local police department.

Some owners or managers might be reluctant to share numbers with employees. One concern is that workers might leak information to competitors. But if employees have been sufficiently motivated by equity stakes or bonuses that are entwined with company performance, the last thing they’ll want to do is harm the company by aiding a rival. An employee of Square, the privately held San Francisco–based payments company, tells me that over the multiple years that Square has been sharing financial numbers with its employees, there’s never been a single leak—despite operating within the incestuous, cutthroat realm that is the Bay Area technology sector.

Another worry is that sharing numbers might fuel employee resentment over how budgets are distributed. But according to Case, most low-level workers vastly overestimate how much of their company’s revenue is profit. When they learn how thin the margins truly are, they develop far more respect for attempts to limit needless expenditures. In situations where layoffs become necessary, opening the books can help workers understand why the company was forced to cut jobs. Case credits open-book management for frequently defusing adversarial relationships between labor unions and management. (Sharing information about individual salaries is still very rare, for obvious reasons. But consider: In the wake of the firing of Jill Abramson, executive editor of the New York Times, there were reports that Abramson had battled ownership over getting fair pay in comparison to her predecessor in the job. Salary transparency could put an end to these kinds of conflicts. Still, most open-book firms choose to reveal payroll outlays in the aggregate.)

Perhaps the biggest stumbling block isn’t merely presenting the numbers, but presenting them in a way that’s understandable to all employees. “I still learn new concepts every time I look at our bookkeeping,” says my friend with the industrial plumbing parts company, “and as the president and owner, I expect to have a pretty good handle on it. For an hourly machinist, it might be a challenge. And they might be tempted to say, ‘Why can’t I just do my job?’ ”

But just “doing your job” as a hired hand, with no comprehension or motivation when it comes to how you contribute to the company’s bottom line, is exactly what open-book management seeks to eliminate. It thus becomes vital to teach employees some basic accounting and corporate finance concepts, with regular tutorials, so the numbers getting shared will have real weight and meaning. Open-book companies often end up developing their own educational modules as they figure out ways to make financial statements clear to all sorts of different workers.

Along with transparency and explication, the third leg of the open-book stool is making sure everyone has skin in the game. Knowing the numbers and what they represent only gets you so far. Workers must also be incentivized to move those numbers. But incenting  employees without giving them an idea of the impact they make financially can actually be counter-productive.

Open-book has always been a quirky management choice, rarely adopted by big, mainstream companies. As recently as October, a post in the New York Times’ You’re the Boss blog wondered why more corporations don’t open their books. But the strategy continues to find its adherents.

People say, It wouldn’t work for my business, but I’ve talked to people using it successfully at accounting firms, law firms, marketing agencies, and local governments, along with a lot of industrial companies. To me, it’s the most logical management system there is. Make your employee team a part of your corporations business solution, not just another part of the corporate problem.

 

Joe Buck, NCE

Florida quietly shortened yellow light lengths, resulting in more red light camera tickets for you! May 22, 2013

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A subtle, but significant tweak to Florida’s rules regarding traffic signals has allowed local cities and counties to shorten yellow light intervals, resulting in millions of dollars in additional red light camera fines.

A Tampa News department discovered the Florida Department of Transportation (FDOT) quietly changed the state’s policy on yellow intervals in 2011, reducing the minimum below federal recommendations. The rule change was followed by engineers, both from FDOT and local municipalities, collaborating to shorten the length of yellow lights at key intersections, specifically those with red light cameras (RLCs).

While yellow light times were reduced by mere fractions of a second, research indicates a half-second reduction in the interval can double the number of RLC citations — and the revenue they create. The investigation stemmed from a December discovery of a dangerously short yellow light in Hernando County. After the story aired, the county promised to re-time all of its intersections.

Red light cameras generated more than $100 million in revenue last year in approximately 70 Florida communities, with 52.5 percent of the revenue going to the state. The rest is divided by cities, counties, and the camera companies. In 2013, the cameras are on pace to generate $120 million.

“Red light cameras are a for-profit business between cities and camera companies and the state,” said James Walker, executive director of the nonprofit National Motorists Association. “The (FDOT rule-change) was done, I believe, deliberately in order that more tickets would be given with yellows set deliberately too short.”

The National Motorists Association identifies itself as a grassroots group that’s been advocating for drivers since 1982. It fought the national 55 mph speed limit and is now campaigning against red light camera technology, contending the technology primarily targets safe drivers who are victims of short yellow lights or safely roll through right turns.

Proponents of the technology hang their hats on a reduction of serious accidents at RLC intersections. They also point out that every electronically generated violation is reviewed by a local police officer or sheriff’s deputy before a citation is validated and sent to a driver. But questions about the fairness and constitutionality of RLCs linger, with questionable motivations of the state’s yellow light reductions likely to add fuel to the fire.

FDOT CHANGES THE RULES

Yellow light times are calculated by a complex formula that takes into account variables such as the size of an intersection, the incline/decline of the roadway, driver reaction time, and deceleration rate. But ultimately, the proper intervals come down to a driver’s approach speed.

When the Florida legislature approved 2010’s Mark Wandell Act, regulating red light cameras across the state, FDOT had a long-standing rule that mandated yellow light calculations factor in either the posted speed limit or 85th percentile of drivers’ actual speed — whichever was greater.  The point of the law was to calculate safe stopping times for the majority of drivers on any given roadway.

But in 2011, FDOT struck the “whichever is greater” language from its Traffic Engineering Manual (TEM), reducing minimum yellow light lengths and allowing communities to re-time their signals at RLC intersections.

A number of communities have shortened their already-safe intervals to the new minimums. In some cases, FDOT mandated longer yellow lights, but seemingly only at intersections that hadn’t been in compliance for years.  Around Greater Tampa Bay, the yellow interval reductions typically took place at RLC intersections and corridors filled with RLC cameras.

FDOT’s change in language may have been subtle, but the effects were quite significant. The removal of three little words meant the reduction of yellow light intervals of up to a second, meaning drastically more citations for drivers. A 10 News analysis indicates the rule change is likely costing Florida drivers millions of dollars a year.

“I think it’s immoral to do that,” Walker said. “You’re basically punishing safe drivers with deliberately improper engineering. That’s not moral to me.”

But FDOT claims it had no financial motive to shorten yellow lights; the agency doesn’t receive any direct payments from RLC fines.  The state’s portion of each $158 citation is split between its General Revenue Fund ($70), the Department of Health Administrative Trust Fund ($10), and Spinal Cord Injury Trust Fund ($3).

FDOT Traffic Operations engineer Mark Wilson said the agency was merely cleaning up language in its TEM to match federal guidelines. But 10 News found Florida’s rules were already in compliance with federal guidelines, and there are no federal suggestions discouraging the use of “whichever is greater.” FDOT is also ignoring numerous other federal guidelines (see below) that encourage longer yellow intervals.

 

SHORTER YELLOWS: WHO’S DOING IT?

FDOT’s revised TEM provides bare minimum yellow light intervals for RLC intersections, based on speed limit. While the formula can fluctuate if the approach grade isn’t flat, no consideration is mandated for drivers’ actual approach speed:

But local news crews found numerous communities using , or skirting, the minimums:

  • Port Richey, New Port Richey, and FDOT collaborated to reduce yellow light times along U.S. 19 from 4.5 seconds to the bare minimum, 4.3 seconds.
  • An FDOT analyst instructed New Port Richey to reduce its yellow light interval for the Main St. RLC (at U.S. 19) from 4.0 seconds to the bare minimum, 3.0 seconds.
  • Hillsborough County shortened the yellow interval on Bell Shoals Road (at Bloomingdale) in Valrico from 4.0 seconds to the bare minimum, 3.6 seconds.
  • Tampa has yellow lights below the state’s 4.0-second minimum for 45mph zones at Hillsborough/Nebraska and Adamo/50th. Those RLC intersections turn red after just 3.9 seconds; city engineers claim the complex yellow light formula allows them to go below the TEM minimums.
  • St. Petersburg had yellow intervals that were shorter than FDOT minimums, but alert resident Matt Florell pointed them out and the city fixed them. Florell said thousands of citations were issued inappropriately, while a city engineer said four intersections had slight “malfunctions,” where the yellow lights were only off by 0.1 seconds. Either way, ticketed drivers were not notified of the issues and no refunds were offered.
  • Oldsmar had a similar issue, where its intersection at Tampa Rd. and SR-580 (State St.) was improperly timed.  The yellow light was just 3.0 seconds instead of 4.3 seconds. When the problem was addressed last fall, citations plummeted by 90 percent. But no notices, or refunds, went out to ticketed drivers.

FDOT’s new rules didn’t shorten every RLC intersection’s yellow lights; many cities and counties had lights that were so far out of compliance the new minimums actually increased the intervals.  Tampa and Hillsborough County both increased some intersections in recent years, but most in their jurisdictions remain at the bare minimum.

St. Petersburg city councilman Charlie Gerdes has also been pushing his city to lengthen its yellow intervals, about half of which are at the state minimum, but Gerdes has had trouble getting the entire council to follow him on the issue.

So bottom line, our salaries have dropped, our home values plummeted and thus the counties tax revenues. have fallen. In order to live the way we are accustomed and to keep the healthy salaries of the county and state elected officials at their current levels, they have to get the money from someplace…why not from your driving habits. And remember that these traffic light tickets will affect your insurance rates….hmmm…conspiracy?

Telecoms still wrestle with Sandy; most cellular networks restored – Red Cross is helping November 6, 2012

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Verizon Communications says it may be a few weeks before all of its wired and Internet customers affected by Superstorm Sandy see their services fully restored, especially in areas still without power. Meanwhile, Verizon Wireless says 98.1% of its cell sites hit by the storm are up and running. AT&T has 96.5% of its sites restored in the affected areas, with more than 90% of its sites in New York City restored.

The American Red Cross has a massive response to Superstorm Sandy underway to help people across multiple states. The Red Cross is providing aid and comfort to thousands and has large relief operations underway in New York and New Jersey, where residents felt Sandy’s biggest impact. Shelters and feeding sites are open and emergency vehicles are distributing food, water and relief supplies in these states.

These poor people got hit hard. The Red Cross response to Sandy is very large, and will be very costly. People can make a financial donation in support of Red Cross Disaster Relief by visiting http://www.redcross.org, calling 1-800-RED CROSS (1-800-733-2767) or texting the word REDCROSS to 90999 to make a $10 donation. You can also use the “donate” feature on the free Red Cross Apps for mobile devices to support this relief response. Contributions may also be sent to someone’s local Red Cross chapter or to the American Red Cross, P.O. Box 37243, Washington, DC 20013.

Joe Buck, NCE

Company can fix your Speeding Ticket – and they turn $1m in revenue February 21, 2012

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Steve Miller’s first instinct was to heckle his brother about his speeding ticket. But then he saw a business opportunity in his brother’s reckless-driving habit. In California, a process called “trial by written declaration” makes it easier to get a speeding ticket dismissed or the charge reduced. And it can be done without a court date. The “trial by written declaration” is on the back of every ticket, but few people notice it.

TicketBust.com coaches California drivers in this little-known method to fight traffic infractions, such as speeding tickets, sign violations and blowing red lights.

Miller’s enthusiasm for the business idea grew after his brother, through the “trial by written declaration” process, was found not guilty. In 2004, he launched TicketBust.com in Westlake Village, Calif., as a one-man operation. Today, the company has 10 employees. Customers e-mail TicketBust.com details about their ticket. Then they send the company three signed copies of the Trial by Declaration form and pay $249 to have those forms mailed to the judge or another officer of the court. They also receive a copy of Miller’s book: “Traffic Tickets: Don’t Get Mad. Get Them Dismissed.” There is a money-back guarantee that the ticket will either be reduced or dismissed. Customers can also opt to purchase the book and do the process on their own.

Miller is constantly trying to stay ahead of competing companies. He launched a free iPhone and Android app that allows customers to take a photo of the ticket, fill out a brief form and sign up with TicketBust.com. Only his company offers this perk. He also beefed up his website.

Only nine percent of tickets are actually contested but that is quickly changing. By November, it is estimated that TicketBust.com had worked on 38,000 cases. “The court likes it because it eliminates their court time and the courts are very full right now with cases that are backed up by months,” said Miller. “There will always be traffic tickets. In this economy, our business has gone up, because people do not want to pay their tickets. People are more frugal about where they put their money.” Apparently this is good for TicketBust.com, in October of 2010, TicketBust.com passed over the $1 million in revenue mark.

Steven Lubell, a judge who sat on the bench for 11 years in Los Angeles Superior Court before retiring in March 2010, said some traffic tickets are issued in error, or for one-time mistakes: “A lot of municipalities get it wrong and calling attention to it is a good thing,” said Lubell. “People make mistakes. People run a red light or go through a stop sign. However, for repeat offenders, services like TicketBust.com might only enable the speeder, Lubell said. “If they’re getting away with what they’re doing and doing it again, that’s not a good thing. If they’re getting caught that many times, their traffic behavior needs to be reviewed.”

(Found on CNN Money report)

Business idea…anyone?

Citizens can be forced to decrypt their laptops – our rights at risk? January 26, 2012

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A U.S. judge has ordered a woman to decrypt the encrypted contents of a laptop computer, or face consequences that include being in contempt of court. As reported on CNET News, the Fifth Amendment was ruled as not being a factor here. According to the judge, “I find and conclude that the Fifth Amendment is not implicated by requiring production of the unencrypted contents of the Toshiba Satellite M305 laptop computer.”

In this instance, the defendant, Ramona Fricosu, has been accused of being involved in a mortgage scam. A laptop found in Fricosu’s possession had been encrypted with Symantec’s PGP Desktop, which she has declined to decrypt. At the heart of the issue is the assertion that an American’s Fifth Amendment right against self-incrimination does not extend to encryption passphrases–much as how one can be compelled to hand over the keys to a safe.

Unlike a physical key though, a defender could claim to have forgotten a passphrase. I’m not sure how Symantec PGP Desktop works, but the use of full disk encryption would leave no way for a prosecutor to even prove that a laptop has been used recently.

Indeed, Fricosu’s attorney alluded to this possibility, noting that “if that’s the case, then we’ll report that fact to the court, and the law is fairly clear that people cannot be punished for failure to do things they are unable to do.”

It is certainly too early to guess how such cases will have a bearing on the way business data should be protected. Given that backup copies of passphrases are usually stored as a precaution, I think it would be fair to say that businesses should work with the assumption that encrypted data can be decrypted at the insistence of the courts.

To me,  Government is sending a clear message that we have no rights to privacy in our lives. Remember the days when we worried about “big brother” watching over us? It now appears that “big brother” will go to any lengths to control us. Don’t get me wrong, I don’t believe that what the defendant did here was right, I just believe that we all have rights to privacy as citizens and when those rights are allowed to be violated (with or without good cause) then we all stand at risk. Moral to this story…I guess if you don’t want it in the public, don’t save it on your computer because your computer really isn’t a part of your private domain.

Joe Buck, NCE

Put down the mouse and pick up the phone… January 17, 2012

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Email has fundamentally changed the way we interact with one another.  But an impersonal e-mail or instant message simply cannot replace live conversation. This especially applies when resolving a conflict or communicating an important business decision. Far too many people try to do sensitive business via email.  This is problematic because tone, urgency, sincerity and context are easy to misread.  In a live conversation, how one says something is as important as what they are saying.  Without inflections and intonations (the true heart of the English language), it is virtually impossible to understand the feelings andf thoughts behind the words.  In fact, email-based conflict usually escalates because you aren’t forced to be as thoughtful as you would be in a one-on-one conversation.

Next time you have a delicate or complex issue to discuss, take it from me, put down that mouse and pick up the phone.  Both you and your counterparts will be glad you did.

Joe Buck, NCE

If your not making mistakes your not trying hard enough January 9, 2012

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The best business ideas often spring from strategic stumbles. It’s essential to tolerate and even encourage mistake-making to create space for serendipity. Deliberately making errors goes against the human grain and should not be tolerated, but trying too hard to avoid them may be the greatest mistake of all. I had always heard, if your not making mistakes your probably not working hard enough.

Joe Buck, NCE

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