Al robson

Good managers with good information can make good decisions but it takes a good leader to successfully implement those decisions — especially the unpopular ones.

Every week I have an opportunity to talk to drycleaners around the country and more than 80 percent are reporting that sales during the last six months have been very unpredictable.

I’m getting reports that sales were up in November, down in December, up in January and, it is anyone’s guess where February sales will come in. Many drycleaners report sales that fluctuate dramatically from week to week.

This volatility in volume shows that, for many customers, drycleaning is becoming more of a luxury than a necessity. That is not to say that the customers don’t need clean clothes to wear. It says that — when money is tight — they don’t get their clothes cleaned quite so often. Also, many cleaners are finding customers who have started washing and ironing their dress shirts at home. With less disposable income, it is easy to cut back on non-essentials such as restaurants and drycleaning.

In fact, the Wall Street Journal recently reported that the National Restaurant Association has launched a $2 million-plus advertising campaign to get diners out again. Many restaurants have seen sales drop 30 to 40 percent below a year ago.

Upon deeper analysis, we find that the volatile sales conditions in the drycleaning market are a mirror of the general economy. The U.S. has been in a mild recession for the past year.

During most recessions productivity nationwide stops growing or decreases. However, the Labor Department reported that for the last three months of 2001, productivity grew by 3.5 percent. This is phenomenal growth during a period of recession… so what is going on?

Productivity, or output per hour worked, usually declines during a recession because businesses do not react quickly to lower demand for goods and services. Consequently, businesses are slow to reduce hours and/or lay people off. The opposite was true in the last three months of 2001.

Why?

Today, computers provide businesses with instant information and comparisons. For example, Airborne Express delivered 82,755 packages in the fourth quarter of 2001, 2.4 percent less than for the same quarter last year. The company moved these packages with 9.3 percent fewer labor hours. This was accomplished in part because of the company’s first layoff in its 55-year history.

In the midst of these layoffs, the company shipped 7.6 percent more packages per employee than in the fourth quarter of last year. As soon as Airborne’s customers began shipping fewer packages, Airborne responded quickly by cutting hours and laying people off.

With production standards in place, the managers of these companies know exactly how much production is expected from each employee, each hour of every day.

More important, they know exactly what the actual production was at the end of each day. Having this information on a daily basis provides them with the opportunity to correct any shortfalls immediately.

Everyone who is managing a drycleaning business has the same opportunity to utilize computers and standards.

Whether you provide all same-day service (in by 10 a.m. out by 5 p.m.) or you have a two- or three-day turnaround, you know how much work (pieces) you need to process each day.

Knowing this, you know — or should know — how many hours your production people need to work every day. Having this information — daily — is good management. Acting on this information in a positive manner, by ensuring that your employees work only the hours necessary, is good leadership.

Leadership is a time-consuming activity because it requires a great deal of two–way communication. When a company is small — with six or fewer employees — it is easy for the individuals to identify with each other and to work together for the good of the company.

As the company grows, communicating with the employees becomes more difficult. The company’s overall purpose becomes subordinate to the needs of the individual.

When employees begin to think that their individual needs are more important than the overall needs of the company, organizational chaos begins.

To avoid this, management must consistently promote the company’s purpose for existing.

Every company needs a purpose. The purpose of your company’s existence must be thought through, documented and communicated to all the “stakeholders”. That is stakeholders, not stockholders.

Your stakeholders are your:

• Employees

• Customers

• Vendors

• Neighbors

• Community

Good leaders know their organization’s purpose and they make that purpose the dominant part of the company’s culture. If you say your purpose is to make lots of money, you will fail miserably in your attempt to get the support you need from your stakeholders. Business is like all of life… it is a two-way street.

Being in the middle of a slower economy is not all bad news. Currently, unemployment is at 5.6 percent and most economists expect it to go to 6.5 percent over the next six months.

This is good news for all employers because it puts you back in the driver’s seat. Now you can be:

• More selective with new hires.

• Less tolerant of employees with poor attendance.

• Replace employees with poor work habits.

When unemployment was less than three percent, many owners were pressured into giving raises to marginal employees for fear that they would quit and couldn’t be replaced. Now there are many quality people eager and available to work.

Every job in your business should have a set value — from entry level to the most senior.

For example, if the hourly rate for retail customer service personnel in your area is $6.50 to $8.50 per hour then you should not be paying $10 per hour.

The question is: Are you obligated to give every employee a raise every year just for having worked for you for the past 12 months? No!

It is now time to re-institute the “merit raise” program. Good leaders will implement this plan now by informing all current employees and new hires that all future raises will be based on merit — not longevity.

Do not wait for an employee’s anniversary date to tell them “By the way, you’re not getting a raise this year because you didn’t earn one.” You must be a good communicator to be a good leader.

The year 2002 is the year to focus on improving the quality of your workforce. This is the year to train and re-train your employees. It is the year to improve the quality of the service you provide your customers. It is the year to improve the quality of your work.

You will do this by inspecting every garment before it reaches the most important inspector… your customer! This is the year to improve the quantity of work being processed by each employee. This is the year to focus on making everyone in your organization a better employee. Your focus will become your reality.