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Should You Join The Family Firm?

Written by Alan Creedy on . Posted in The Creedy Commentary, General Topics. 3 Comments on Should You Join The Family Firm?

Should You Join The Family Firm?

When John decided to pursue his career by coming to work at the family funeral home he thought (as did everyone else) that someday he would succeed his parents and own the firm. John is now 46 and his parents are in their late 60’s. In retrospect, John realizes that things haven’t been what he expected. He didn’t so much join the family firm as go to work for his parents.

At 46 John has never been allowed to make a major decision, never seen the company’s financial statements and is unsure whenever retirement comes for his parents whether he will have the chance to buy it (he has no significant cash resources) or if it will be sold to a third party.

This may sound bad to you, dear reader, but it is much more the norm than the exception. And it could all be avoided by asking some critical questions up front.

3 types of parents

I find 3 types of parents who own small businesses.

  • Those whose dream it is to pass the business on to their children
  • Those who welcome their children into the business but are ambivalent about it.
  • Those who would prefer their children seek other opportunities

From what I have learned about family businesses in general, each represents about 1/3 of current business owners.

But the real question is whether the current generation will ever be prepared to transition the business to their kids appropriately…and appropriately begins almost the day children join the business.

Trial period

It is often wise at a young age to “try on” the role. I do believe if children are considering funeral service as a career that they work for a couple of years at the family firm…just like everyone else. This means the same regimen, expectations, compensation and hours. NO SPECIAL TREATMENT. In this way, everyone has the chance before final commitments are made to see if it’s a good fit. Warning signs might be:

  • Inability to keep the same hours as other employees
  • Difficulty in interacting with families, guests and (especially) dead bodies
  • Lack of reliability
  • Inability to see oneself in this role for the rest of one’s life.
  • Inability to get along with your parents or siblings

There are good questions to ask yourself too:

  1. What is motivating me to join the firm?
    1. Dad or mom wants me to but I am not sure
    2. I can’t find anything else that interests me and I know I can get the job
    3. I can’t make as much money doing anything else
    4. I have watched my parents and I want to be like them
    5. I don’t really know
  2. Are family relationships healthy enough?
    1. Does our family have a track record of making good decisions together?
    2. Does my family value my input?
    3. How do we historically resolve disputes?
    4. What is my role compared to my siblings/cousins?
  3. Ask your parents early
    1. what is my career path?
    2. How will I be developed to take over running the firm?
    3. How will we know I am doing well?
    4. How do you envision my involvement in company governance?
    5. What, specifically, are your expectations for my performance?
    6. If we decide this is not a good fit, what then?
  4. is there a path to ownership?
    1. How do you imagine you will someday hand over ownership?
    2. is ownership available to siblings that don’t work in the business?
      1. If the answer to this is yes it should be a deal killer.
    3. How can I best contribute to the company’s prosperity?
    4. When it’s time for you to retire will I need to buy the company for full value or discounted value?
  5. Mom, Dad what is your vision for our future?
    1. what will we look like in 20 years?
    2. How will we get there?
    3. Will we still be relevant?
    4. Will my brothers and sisters be joining us?
      1. How will we determine who should be in charge?
      2. Will we have equal ownership?
        1. If so, how will we break the inevitable tie?

As I write this it occurs to me that most owners I know aren’t prepared for this type of conversation. But, maybe that’s a good thing. Because if you engage in this conversation (parents and children and key employees) it will cause you to crystallize some of the things you need to start working on to get you to that inevitable day.

100% of us will die and 100% will someday stop working. In my practice I see good stories; but, more often, I see sad stories. The good ones almost always are about people who thought things through ahead of time. The sad ones often didn’t think about it at all.

Fair Warning:

Funeral directors are notoriously passive-aggressive. This is especially so when they don’t want to address difficult issues. Sometimes it is necessary to have a 3rd party moderate this process. If, however, you are getting nowhere in getting your parents to address these important issues or answers are ambivalent and vague you have no right to expect that will ever change. So, you have a career decision to make. Some of the most successful owners I know had to confront the issue head-on and were prepared to leave the family firm. In the end, everyone was glad they did.  It’s called peace of mind.

The Neurosis That Defines Funeral Service: Perfectionism

Written by Alan Creedy on . Posted in The Creedy Commentary, General Topics. 2 Comments on The Neurosis That Defines Funeral Service: Perfectionism

I have a book on my office shelf entitled “Perfectionism…Sure Cure For Happiness”. The reason this is important is that, having performed almost 100 culture assessments in funeral service I know that perfectionism is the dominant industry neurosis.

Yes, I agree, “Funeral Service Is In The Details”. But it’s how we measure performance that gets it all cockamamie. In funeral service there is a fundamental, prevailing belief that colors our judgment of ourselves and others:

“A good funeral director works long, erratic hard hours.”

In fact, the most common badge of honor is between 60 & 70 hours a week. Now, I am not saying that there are not times when working 60 hours is necessary. But I will say, as I approach 40 years experience, that there are times when it is not. More important, is that the drive to honor this standard frequently produces guilt when one is not at work. This lack of work/life balance leads to family disappointment and guilt and a rising sense of burnout.

In recent years the consulting side of my practice has grown as I help people who still like what they do very much but are plain tired from the work and responsibility of owning a business. Helping the business run more efficiently is often easy. But the real work is in helping owners figure out how they can achieve a better work/life balance. And the single most common barrier to that is guilt. And my greatest champion is the spouse who has seen it all along.

Peter Drucker once observed:

“What is the major problem? It is fundamentally the confusion between effectiveness and efficiency that stands between doing the right things and doing things right. There is surely nothing quite so useless as doing with great efficiency that which should not be done at all.”

What would I do?

 Outside of hiring me to help you center and refocus and “get a life”, I would buy the book “E-myth” by Michael Gerber, take 3 days off in a quiet place (leave your cell phone at home) and read it. You should come away with some serious personal insights and that is where you must begin…with you.

One is often faced with choices. One choice will lead to resentment. The other choice will lead to guilt. Always choose guilt.

 

Difficult Conversations For Those Who Hate Conflict

Written by Alan Creedy on . Posted in The Creedy Commentary. 4 Comments on Difficult Conversations For Those Who Hate Conflict

Funeral directors are notorious for being conflict avoidant. Yet they have a job where they must engage in difficult conversations with staff, vendors and their customers.

I used to attend a church with a pastor who would go to bizarre lengths to avoid conflict. He was beloved by the congregation and staff alike. But the administration was a train wreck. Amazingly, one word changed his whole perspective. More on that later.

8 insights for engaging in difficult conversations for those who hate conflict

1. Always be clear about what YOU want. Never engage in a difficult conversation in the heat of the moment. The mistake a lot of people make is they focus on the negative. Instead focus on the desired outcome. Know in advance the outcome you want. It also helps to know why you want it. If an employee is consistently ignoring established systems, what you want might be compliance. Or a disruptive member of a family you are serving might need to be made aware that their behavior is in conflict with the outcome THEY should want. With staff discipline don’t phrase things as warnings or probation. Clearly state your expectations.

2. Begin from a place of respect and curiosity. Edgar Schein, a renowned expert in organizational development, calls it “appreciative inquiry”. Being forced to have a difficult conversation doesn’t necessarily mean the other person is a “bad” person. Taking an interest in the other’s viewpoint and seeking to understand THEM automatically creates an atmosphere for progress.

3. Stop worrying about being liked. Conflict avoiders are usually preoccupied with their likability. People who are clear and direct and enable others to always know where they are coming from are almost always liked and respected more than the doormat.

4. Focus on what you are hearing not what you are saying. As long as you are clear about what YOU want it is much better to listen than it is to talk. Once you express the purpose of the conversation you should do much more listening than talking. Mirroring the other person’s viewpoint and repeating in your own words to make sure you understand them correctly can help you figure out what to do next.

5. Say it! People like people who are direct but not abrasive. They want to know what you want, how you feel and where they stand. Be direct, honest and clear. Don’t beat around the bush. Don’t spend time on unrelated conversation or hesitate.

6. Do it now but don’t do it mad! I learned a long time ago not to address difficult conversations emotionally. Sometimes I just need to calm down and put some space between me and an event. NEVER EVER let it be personal. So waiting a few hours or even a few days is OK. But waiting weeks and months is not. No one likes a “stamp collector” (one who saves up criticism to unload it all at once).

7. Expect a positive outcome. Even if that outcome is something undesirable outcomes should be a step forward not backward. Worse yet is to leave something UNRESOLVED.

8. Don’t equivocate.  Compassion is one thing. Cowardice is something else entirely. Misplaced compassion can cause you to defer discipline or lower expectations. Assuming you are clear about what you want…stand your ground.

About that pastor and the miracle word.

The situation at the church reached a crisis and the board brought in a church consultant. His advice to the pastor:

“stop seeing conflict as confrontation. Instead think of yourself as helping others with CLARIFICATION. It was absolutely amazing to see the results as the pastor began clarifying expectations.”

Serve more families, work less and be more profitable

Written by Alan Creedy on . Posted in The Creedy Commentary, Leadership. 3 Comments on Serve more families, work less and be more profitable

Staff shortages among licensed professions have been successfully addressed by changing the model in the medical and legal professions. The solution is simple: focus skilled licensed staff on the right duties and supplement them with trained lower level staff. The result: Licensees handle more cases, work fewer hours, produce more income and, as a byproduct, are happier in their work.

I became aware of such a working model in funeral service last year and traced it to my friend David Tudor. I asked David to briefly share his insights with us.

                                                                                                Alan Creedy

The Highest and Best Use Model For Funeral Home Staff Management

Softening revenue resulting from increased cremation has funeral home profitability very much compromised. In addition to reduced revenue, appropriate profitability has a direct correlation to wages and benefits paid to staff for delivering at need funeral services. Wage costs along with associated benefits often are 45% or more of sales; when, in fact, this ratio should be less than 40% combined.

Since the highest paid employees are often licensed funeral directors it is here we should first focus on determining optimum wage utilization. Consider that a typical at need service requires about forty (40) hours of staff time. Of this total less than ten (10) hours are required to be licensed time. Care must be taken to assure many of the ancillary, non-licensed duties do not involve an inordinate amount of a director’s time.

Increasing staff utilization doesn’t mean working harder…just smarter. A LFD earns premium earnings for applying his/her skills and experience arranging, directing and embalming. Therefore providing structure and support to minimize their time with non-licensed duties must be continually addressed. Accomplishing this is not a matter of directive, but in fact a defined staffing approach and structure. Elements of this include:

Director of Operations (DFSO) – Someone designated to oversee, coordinate and assign new at need cases…not leaving it for a collegial staff discussion. The DFSO also determines the staffing coverage for services, including the assigning of non-licensed part timers for ancillary support duties. This frees directors for the next licensed obligation.

A Pool of Part Time Associates – Using the medical term “PRN;” (use as needed) these are individuals, notified today, for a service need tomorrow. This PRN pool should contain about three (3) to four (4) people per every 100 annual funeral home cases.

About this Pool

  • They must be recruited, sought out, don’t wait for them to show up at your door.
  • There are usually three (3) categories of PRN’s:

Visitation Associates – greeters at visitation.

Funeral Service Associates – perform all the ancillary, non-licensed tasks of a LFD.

Transfer staff – physically qualified for first call duties.

  • They must be trained in your methods and practices (Use of a job description as a training guide makes orientation and training easy and effective.)
  • Compensation can be an hourly rate, perhaps with a 3 hour minimum or a flat fee. Often they are paid a small stipend to be on call for night transfer duty.
  • The pool will have turnover, do not let that deter you. Keep focus on maintaining a full complement of part time associates. Consider maintaining a pool of three (3) people per 100 annual calls.

If a LFD can be supported to increase his/her license utilization from 65% to 80% that will mean handling 20 more at need cases per year. (Ninety (90) percent plus utilization should be the goal and is comfortably attainable.) Implementing a PRN pool to support two (2) or three (3) LFD’s can easily mean not hiring another LFD.

A large client of mine, realized this advantage years ago. By increasing their part time staff over a 3 year period, and through attrition reduced their licensed staff more than 60%. Included with the new staff model, their previous sixty (60) hour workweek schedule was reduced to just over forty (40) hours, with no decrease in compensation to staff associates.

In states that allow non-licensed transfers the benefit for the firm and LFD is even greater. Firms create a pool of two (2) to three (3) part time non-licensed individuals. (Trauma experienced first responders are excellent candidates.) The LFD on call coordinates the night transfer from a “bedside – station.”

Bottom Line – To increase your bottom line, don’t burden yourself with misdirecting the use of a licensed associate.

David Tudor is President of The Directions Group, Asheville, NC.

David’s counsel has benefited funeral homes nation-wide for over four (4) decades.

thetudors@charter.net

Is A Scarcity Mentality Keeping You From Being A Good Leader?

Written by Alan Creedy on . Posted in The Creedy Commentary, Leadership. 2 Comments on Is A Scarcity Mentality Keeping You From Being A Good Leader?

A Scarcity Mentality is the zero-sum paradigm of life.

People with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production. They also have a a very hard time being genuinely happy for the success of other people. Yet it is a scarcity mentality that prevails in funeral service and gives rise to so much of the infighting that holds us all back.

One of the primary responsibilities of a leader is to develop people by empowering them.  But this doesn’t mean just giving people the keys to the vault and hoping for the best.  It is hard and complicated work.

Almost 40 years ago an article appeared that has since become a classic.  Entitled: “Who’s Got the Monkey?” it used a charming metaphorical style to illustrate how we often voluntarily become subordinates to our subordinates.  Characterizing problems as monkeys we learn that by assuming every problem is a joint problem we actually unwittingly cooperate in this game of transferring monkeys.

Over time, it becomes harder and harder to tell who is working for whom!

The essence of staff development is teaching people to manage their own monkeys

This makes sense and the article goes on to describe a very precise method for transferring monkeys back to their rightful owners.   Also included is an equally precise outline for the care and feeding of monkeys:

  1. Monkeys should be fed or shot
  2. The monkey population should be kept below the maximum number the manager has time to feed
  3. Monkeys should be fed by appointment only
  4. Monkeys should only be fed face-to-face or by telephone
  5. Every monkey should have an assigned next feeding time

How A Scarcity Mentality Hinders Your Ability To Manage Monkeys and Develop People

25 years after the original publication of “Who’s Got the Monkey?” Steven Covey published a followup article entitled: “Making Time For Gorillas” In which he very accurately observed that we had made little progress in the development of leadership styles beyond the “Command And Control” style that prevailed at the time of the original publication.  “Command and Control” is one of the two dominant leadership styles in funeral service.

Covey’s insight included the observation that for leaders to successfully manage monkeys they must first invest in developing their people.  “Command and Control” types are reluctant to do that.  Worse,

They are actually eager to take on their subordinate’s monkeys.

“…many managers may subconsciously fear that a subordinate taking the initiative will make them appear less strong and a little more vulnerable.” Says Covey

Covey also tells us that surveys report that executives feel half or more of their time is spent on matters that are urgent but not important.  They are trapped in an endless cycle of dealing with other people’s monkeys...reluctant to help those people take their own initiative.

If I were a “Command and Control” type here is what I would do:

  1. Download and read the original articles by clicking on the image below
  2. Let my wife and kids read it so they would have a better understanding of why I never have time for them
  3. Share it with my staff
  4. Get over myself and start making the investment in my people so that I could trust them and I could enjoy my life.
It’s your choice.
YOU CAN BE A SHOP FOREMAN OR A LEADER

 CLICK ON THE IMAGE TO READ THE ORIGINAL ARTICLE

 

How To Stop Customers From Fixating On Price

Written by Alan Creedy on . Posted in The Creedy Commentary, Money: Getting it and Keeping it. 11 Comments on How To Stop Customers From Fixating On Price

Equalize Price Points to Crystallize Personal Relevance.

This is the first recession to show a measurable impact on DeathCare.  Most surprising have been the many reports from rural and “rustbelt” funeral directors that cremation has recently spiked, not because people in their markets want cremation but BECAUSE THEY CAN’T AFFORD BURIAL.   YIKES!!!!

A recent article in Harvard Business Review entitled “How To Get Your Customers to Stop Fixating on Price” outlined 4 strategies.  I found the most appealing strategy to be: Equalize Price Points to Crystallize Personal Relevance. The article’s authors pointed out that in :

“most mature markets customers have become unresponsive to marginal changes in value.  They have lost interest in how each product option might serve them… [so] they default to price minimization.  In fact, (and this was interesting) a list of options at different prices doesn’t make [consumers] examine the relative merits of those options, it activates their predisposition to pare the price.” [emphasis mine]

Not a week after reading the article I found myself experiencing the very strategy I liked the most and it was exciting.

I encountered a funeral director who had courageously narrowed his casket price offerings from a low of $1,100 to a high of less than $3,000.  As I stood looking down a row of caskets I actually found myself saying (as if I were a consumer): “Wow, I can pretty much have anything I want.”  Having been in so many selection rooms over my career, at first I was shocked.  Then I found, to my amazement, a feeling of relief.   Here is a picture:

1. Solid Mahogany Urn shaped, Velvet Interior $2,650    2. Brushed Copper, Velvet Interior $2,995  3. Solid Cherry, Urn shaped, Velvet Interior $2,550  4. 18 Ga round end brushed, Velvet $1,740.  5. Oak Veneer, Velvet Interior $1,845  6. 18 Ga two tone blue, square corner, Crepe interior $1,495 7. Stainless brushed velvet interior $2,150 8. L  98 Mandarin $1,150 9. 18 Ga Blue round end, crepe interior $1,575 10. Solid Cherry, Velvet Interior, $2,600.

As I surveyed the selection room above I found myself moving from thinking about what I could afford to which casket I liked best and which would be a good fit for me (just like the research said I would).  And, as if I were an actual customer, I felt relief.  Some years ago I picked a Pembroke Cherry for my prearrangements.  At the time it sold for under $4,000.  I watched it creep up above $5,000 but just figured that was inflation.   When it went over $6,000 I made a mental note to find something cheaper.

Once a consumer realizes they can get pretty much whatever they want for just about the same price they move from thinking about what they can afford to what they want.  The research found that this allowed sellers to price above their normal average.

The implication is this:  Let’s say that your average casket and service sale is running about $7,500 and the range of caskets you are currently offering to reach that average is from $2,500 to $15,000.  The concept of equalizing your price points would suggest that as you narrow your price range you could accomplish two things:

First, you would change the playing field for handling price shoppers and likely increase volume.

Second, you would (as the research found) be able to realize a higher over-all average casket and service sale on what you are currently serving (say from $7,500 to $8,000 for traditional burial).

Of course, this implies that you have exercised some aggressive tactics to control the wholesale cost of your caskets.

This post first appeared in The Creedy Commentary on June 22, 2010

Lessons On Leadership: Peak Performance From Adequate People

Written by Alan Creedy on . Posted in The Creedy Commentary, The Video Blog, Video, Video Gallery. 4 Comments on Lessons On Leadership: Peak Performance From Adequate People

Peter Drucker was the first to draw a parallel between Leadership and Orchestra Conductors when he observed:

“A great orchestra is not composed of great musicians but of adequate ones who produce at their peak. [A great conductor] has to make productive what he has…the players are nearly unchangeable.  So it is the conductor’s people skills that make the difference.”

What makes this particularly applicable to DeathCare is that our workers are not factory line workers as current trends in funeral home supervision and management are beginning to treat them. They are knowledge workers and in this same essay Drucker went on to say:

“The critical feature of a knowledge workforce is that its workers are not labor, they are capital.”

The success of any business is in how it invests its capital and if our workforce is our capital and we manage them like machines in a knowledge environment we are likely to lose. If, instead like the great conductors in this video, we begin to create the environment, the structure and the mechanisms that enable adequate people to continuously operate at their peak then we will realize a 100-fold return on our investment.
But, I fear this video may be too subtle for many in the profession to fully grasp what Mr. Talgam is trying to convey. In essence, his point about enabling the players to tell their own story and thereby become partners is really about building a team of collaborators around a central purpose and the conductor being a team leader.

Some Things To Note As You Watch:

Itay Talgam takes us through the entire progression of management as it develops from the “micro-manager” as represented by Riccardo Muti to what Jim Collins (author of the book: “Good To Great”) refers to as a LEVEL V leader as represented by Leonard Bernstein.

Note the fate of Riccardo Muti

This video is 20 minutes and you may be tempted to stop but HERE IS WHAT I REALLY WANT YOU TO DO:

As you watch the video and as Talgam describes the leadership style of each conductor try and decide where you fit.  If you are an employee, what is your bosses style?

“[A conductor’s] happiness does not come from only his own story and his joy of the music. The joy is about enabling other people’s stories to be heard at the same time.” (Itay Talgam)

How Leonard Bernstein managed to get adequate people to perform at their peak:

My bet is that he did not overpay people.  In fact, compensation probably didn’t have much to do with it.  But I do believe the following components were key factors:

  • He set clear expectations
  • He set personal goals for each player and enabled them to develop
  • He gave regular and speedy feedback
  • He worked one-on-one and in teams
  • He did not accept mediocrity and would not let individuals accept it either
  • Everyone knew how they contributed and they were important to the team
  • Everyone knew they were cared about
  • He took obvious pleasure in THEIR success

Final thought:  Can you imagine the sublime ecstasy Mr. Bernstein experiences in enabling ADEQUATE PEOPLE to accomplish a SUPERIOR PERFORMANCE.

THAT IS A LEVEL V LEADER.

If you want to know what a LEVEL V leader is then take another 2 1/2 minutes and watch this last video

You Must Be Present To Win

Written by Alan Creedy on . Posted in The Creedy Commentary, Leadership. No Comments on You Must Be Present To Win

In the near future the difference between winning and losing in DeathCare will be a result of one factor: LEADERSHIP. Yet many owners and general managers are confusing supervision with leadership and are in danger of turning themselves into nothing more than shop foremen.

Too many funeral home owners blame their staff for the lack of progress in their business.  Yes the staff can often a barrier to progress.  But, frankly it is really not their fault.  It is the fault of the passive aggressive cultures that prevail in this profession…including and probably most especially the owners.  

A Dysfunctional Culture is something YOU allow because of your cowardice or laziness not because you can’t change it.

What is a passive aggressive culture?  In a classic article titled The Passive Aggressive Organization it is defined as:

“… a place where more energy is put into thwarting things than starting them, but in the nicest way.”

What does this mean?

Where does the blame lie?  The list is long…and in light of the urgency of our problems mostly meaningless.   For now let’s just say that there are few, if any, good leadership models in the profession.  Most owners and managers confuse supervision with leadership.  And the recent trend toward installing staff performance systems underscores this in spades.  Yes, these systems are necessary in any business.  After all would a ship leave port without a compass?  But the lack of true leadership skills ends up turning owners and general managers into shop foremen and the model begins to look too much like a manufacturing plant than a service profession.

What is the difference between supervision and leadership?

Think of it this way:

You Manage A Business…

You Lead People.

Supervision is a management function and much easier to grasp because you measure, track and compare.  How was Joe’s average sale vs. Bill’s?  How much time does Jill take to make arrangements vs. Doug?  What is the Bob’s family satisfaction score compared to John’s?  Then, of course, you can hold it over people’s heads.    Supervision is very useful when working with people who don’t have to think (or shouldn’t) and when you need them to focus on components of a task rather than the bigger picture.   But supervision doesn’t motivate.  Supervision doesn’t engage and it certainly doesn’t build loyalty

Leadership, on the other hand, is much harder work…and riskier too.  It means you have to be aware of where you are going as much or more as where you are.  It means that you have to be conscious of and teach and defend slippery things like core values and brand integrity.  You have to build character and give latitude for autonomous decision making because people know what is expected no matter what the odd circumstance.   It means YOU must be responsible for:

Making the Main Thing The Main Thing

Which means you have to know what the MAIN THING is AND you HAVE TO BE THERE.   Not just in your office but with the people…Observing, Coaching, Fixing, Guiding, Changing, Planning…AND OCCASIONALLY CONFRONTING.

Not many years ago a senior executive with one of the major casket companies asked me what I thought most funeral home owners wanted.  Without thinking I heard myself say,

“They want not to be there.”

Where did that come from?

I was totally surprised and, at first, he was confused.  But as I thought about it I realized that I had observed such consistent behavior among owners across so many firms that I naturally drew the conclusion that their preference would be to be someplace else.

Unfortunately,

GOOD LEADERSHIP IN SMALL BUSINESS

REQUIRES YOU TO BE PRESENT TO WIN

The Good News

Leadership…true leadership…is something you learn through experience and mentoring. In fact, it is the part of my funeral home consulting practice I enjoy the most.  Leaders grow into the position.  They are not born.

Leading a healthy culture is not only much more fun FOR EVERYONE, but it creates a significant competitive advantage in the market place  as well.

TUNE IN TOMORROW.  I HAVE A VERY SPECIAL TREAT: A VIVID ILLUSTRATION THAT WILL DEMONSTRATE THE DIFFER-ENCE BETWEEN BEING A SUPERVISOR AND A LEADER.

 

New Book on Reinventing Your Business Features Funeral Home

Written by Alan Creedy on . Posted in The Creedy Commentary. 2 Comments on New Book on Reinventing Your Business Features Funeral Home

I read a lot and sometimes I preorder new books.  This Winter I preordered “THE REINVENTORS, How Extraordinary Companies Pursue Radical Continuous Change“ By Jason Jennings.  I started reading it last week and when I turned to page 60 lo and behold what did I see?  My friend Bill McQueen as one of the case study examples of how to reinvent even a moribund industry.

Bill makes up a healthy part of chapter 3 “Picking the Destination” which begins with the statement:

“The main job of the leader is to be a destination expert, to let everyone know where the company is going and make certain that everyone understands and is willing to embrace constant change in order to get there.”

Some excerpts from Bill’s interview are insightful

“This is a business that was and is ripe for reinvention…the real reason things had to change was because we had to be able to offer the quality of life that talented people wanted and that we wanted to provide them”

“We were wrong in concluding that everyone wanting cremation was a price shopper…price shoppers only want one thing…the absolutely lowest price in town.”

“The breakthrough came when we studied cremations in other societies.”

“The success of the first tribute center led McQueen to the realization that they weren’t really in the business of handling bodies but were, instead, in the business of educating and helping people understand the value of ceremony, ritual and the telling of one’s life story. ‘We weren’t going to be in a business that was about caskets, hearses, and cemeteries anymore but, instead, about helping people transition through loss and come out the other side in a state of peace.’ Once they selected a destination the radical reinvention became easy.

I haven’t finished reading it yet but if you want a copy for yourself click on the picture below:

P.S. ICCFA is hosting author Jason Jennings at its Fall Management Conference.

Liking What You Do Is Not The Issue

Written by Alan Creedy on . Posted in The Creedy Commentary, Leadership. 2 Comments on Liking What You Do Is Not The Issue

I was visiting with a friend last week and the conversation went, briefly, to some mutual acquaintances. We noted how angry they had become as their careers had progressed and concluded they were really frustrated with the career they had inherited from their parents. Disappointment is a normal part of life. Some respond with increasing frustration and anger others make lemonade out of lemons. It is not the card you are dealt but what you do with it that matters, it seems.

In this thought provoking video interview with acclaimed author and Harvard Professor, Clayton Christenson we learn a new way of looking at our circumstances. A way I think we in DeathCare have a unique opportunity to exploit.

To Read a copy of Dr. Christensen’s original article “How Will You Measure Your Life?” click on the title.

Expert Opinion: Game Changers

Written by Alan Creedy on . Posted in The Creedy Commentary. 4 Comments on Expert Opinion: Game Changers

Rick Baldwin

Game-changers are those events that intervene in our lives, on athletic fields, and in our businesses that forever change everything.

In our personal lives we identify marriages, deaths, and moving to a new city as the easiest examples of game-changers.  In baseball, a homerun changes everything. In business, innovation is the most thought-of example.  Look at Sony [and digital photography] or Apple [and their iPads and iPhones]. And speaking of digital photography, that innovation was certainly a game-changer for Kodak, too.

Sometimes, however, an unmet wish that customers have about the current status quo will change the game. This is especially true in fundamental businesses like ours. Starbucks changed the way coffee is served, even though coffee has been served the same way for years.  SouthWest changed the airline industry, even though airplanes and airports are the same. Since the 1920s, every house in America has had a bathtub because Sears sold cleanliness.

And what about funeral homes and cemeteries, where we are accustomed to things staying the same for generations, or when they do change, having the changes carried on the backs of snails?  Are we, too, being slapped with some express game-changers?

Reflecting on this point, I believe as an industry [lumping together funeral providers and sepulcher suppliers] we are in the mid-innings of a game-changer right now.  Here’s my evidence:

  • Over-capacity: Look around. Most funeral homes could easily perform twice as many funerals as they do now.  The hearse runs two hours per week.  Cemeteries still measure their undeveloped lands in acres [that are mostly a big non-producing asset], when those vacant corners near the front gate are the most valuable of all.  And all those anchors add layers of unavoidable cost.
  • Mature consolidation:  The big funeral guys already own most of the major brands in the country’s metro and growth areas, and don’t have any good prospects to buy more. Yesterday’s flagships are struggling with margins, their historic names long ago milked of their original brand values, and most of those formerly esteemed community stalwarts are now losing market share. The new ones they can acquire, scattered here and there, are generally small and don’t add much value.
  • Profitability challenges:  I sold my shares in Stewart Enterprises for $6.10 per share in 2001.  Friday, those same shares traded at $6.26 [more than 10 years later!].  And STEI is not suffering alone. The other publicly traded funeral companies have found it difficult to grow their share prices.  I speculate that their trading prices have stagnated due to narrow capacity to cut their costs, to increase retail prices, or to acquire large and agile operators.
  • Limited opportunity for personnel:  Industry owners must find fresh ways to align shareholder and employee welfares. Corporate directors cannot expect employees to work against their own best interests.  Board rooms must engage local management and pay them to build shareholder value, and then pay them a bonus when it materializes. A message similar to that sent by the ‘Arab Spring’ will need to be heard in the big chairs.
  • Most industry participants haven’t noticed: Interestingly, all over the country, business owners are acting as if nothing has changed. Their commercial models are the same ones employed by their grandfathers. At the same time, the memorial preferences of their customers bear little resemblance to those of their grandfathers’ customers.
  • New eyes are looking for opportunities, building on the back of the old and failing model: As over-capacity lingers, consolidators struggle with shareholder value, margins compress, employees struggle with employer loyalty, and board rooms ignore marketplace realities, new eyes are seeing opportunity. Be on the lookout for emerging industry names that you’ve never heard of before – ones that don’t carry the old baggage.

Yep, this writer thinks we are seeing the acknowledgment of a number of powerful game-changers that are likely to create unparalleled opportunity during the next ten years, as the innovative replaces the obsolete.

Let me know your thoughts on changing the game in our town. Write to me at rbaldwin@urgelborugie.com.

Sincerely yours,

 

Book Review: When Growth Stalls

Written by Alan Creedy on . Posted in The Creedy Commentary, Practitioner Forum: Insights and Ideas. No Comments on Book Review: When Growth Stalls

When Growth Stalls, How it happens, why you’re stuck and what to do about it.

By Steve McKee, Jossey-Bass 2009

“when growth stalls, everything begins to break down.  Confidence wanes, and it can be difficult to tell which problems are cause and which are effect.”  This simple statement hits too close to home in an industry where stalled growth has become the rule rather than the exception.

Based on research involving 5,696 businesses across a wide variety of industries and spanning several years, the author identifies 3 external factors that catch us all off guard and 4 internal factors that make things worse.  He found that stalled companies were more likely to have high turnover, lower margins and weaker customer loyalty.   Compounding this is a correlation with unhealthy internal dynamics including: issues involving trust and respect, inability to make lasting decisions, a tendency to overthink things and, in a strange dichotomy, a propensity to either resist change or switch directions frequently.

But wait, it gets worse.  Stalled companies also “unintentionally build mediocrity into the system by losing the best people, hiring “C” people and hiring on the cheap.”

External Factors

Economic factors include both price resistance and increased cost of doing business.   These occur over time and aren’t always noticeable until long after the trend is set.   McKee warns us about cutting expenses: “You can cut your way to survival but not success.”

Aggressive Competition introducing new ideas or factors into the market place.  In our case, examples might include cremationists and low-price providers.  McKee offers this advice:  “Keep close tabs on your competition…outthink rather than outspend them…and consistently look for ways to enhance and protect your differentiation.”

Changing industry dynamics:  “The marketplace has changed and [players] no longer know their place in it.”

McKee offers this interesting insight: “When there is change there is a ‘misunderstanding’ that can be capitalized on.”

Internal Factors

Lack of consensus: “When growth stalls…people choose sides, challenge each other…and begin to doubt…”  The focus shifts from “what do we need to do” to how can we all get along.

Loss of focus:  “McDonalds stalled out when they became too intent on adding restaurants to customers rather than adding customers to restaurants.”  Loss of focus leads to the wasting of limited resources rather than optimizing them.   Things are always changing.  So, “either a company moves or the market moves.”

Loss of nerve:  Leadership is especially difficult when a company is adrift.  Self confidence wanes because it is confusing, discouraging, contagious, paralyzing and wearying.  It challenges a leaders whole notion of self worth.  The risk of change seems greater than the risk of standing still.

Marketing inconsistency: leaders begin to be reactive with emotional hot spots and use advertising in a point-counterpoint fashion with competitors instead of consistently staying on message.  People trust brands that have consistent approaches to their message.  Companies don’t know who they are if they keep changing their message in a fruitless search for a silver bullet that will solve its problems.

The Take Away

  • Know you are not alone
  • Knowing the seven factors that lead to failure gives us focus and courage to pick up and move forward
  • The “Top Box” concept gives you an excellent template for follow-through
  • It will require focus, discipline and perseverance
  • Find a way to “Mean something to your market and it will reward you.”

I strongly recommend this book to DeathCare professionals who really want to build a thriving business.  It will take discipline and focus, strength and leadership but McKee’s advice will give you a very strong backdrop to make it happen.

Video Interview

Click here for a video interview of Author Steve McKee focused on the application of his concepts to funeral homes.