National Clothesline

On September 17, the Wall Street Journal reported that household net worth in the second quarter of this year plunged 1.4 trillion dollars. They also reported that inventories rose in July.

These reports indicate that our economic recovery may be slower than anticipated for drycleaners.

This means that it is time to hunker down and take a real close look at your staffing needs.

Every owner who has been in business for more than five years and who has more than five employees has at least one key person on staff.

As the business grew, you and your key employee would split different jobs or tasks (functions) based on which one of you was available at that moment. When you could make the time, you did. When you didn’t, your key person had to get it done.

This “time” factor changes from day to day depending on the crisis of the moment and on who is good at doing what.

The “who is good at doing what” factor is driven by your individual likes and dislikes. No one, not even owners, can be good at everything. People are generally best at doing the things they like to do. No one is good at all the duties that must be performed in order to achieve success.

Therefore, as your company grows you must assign specific functions to specific individuals.

Furthermore, you must assign specific performance standards to each function. Everyone must know what is expected of them and one individual must be held accountable for achieving these standards.

The only way to achieve success in a weak market is to organize the activities of your people around the needs of the business.

Situation. A second-generation drycleaner brought me in to survey his business. The company has 13 full- and part-time employees. Of these, two had been with the company for more than eight years and they were considered key people.

This owner’s biggest frustration was that he could never get away from the plant. He knew he couldn’t get away because if he did leave, the work would never get done right or on time.

Background. The owner worked for his father while in high school and college. After finishing college he joined the business on a full-time basis. He and his father grew this business, with one location, from sales of $300,000 a year to $450,000.

Five years before, his father became ill and sold the business to his son. When I arrived, annual sales were at $580,000. This dollar volume had remained the same for the previous two years. Also, expenses had gone up during the last two years which means that profits were down.

The problem. The culture in this company had always been one of teamwork. Everyone knew that the owner wanted employees who were willing to do whatever it takes to get the job done. Over the years, while still paying lip service to this idea of teamwork, there was a shift from teamwork to “what more do you want from me? I’m working as hard as I can.”

This shift was so subtle that no one, not even the owner, could see what had happened. Now, everyone looked busy, but orders weren’t being completed, pieces were getting lost, and no one knew why.

All of the employees in this company were busy all of the time. They were pressing, inspecting, looking for lost pieces, looking for someone to ask “Have you seen a pair of khaki pants?”

The owner spent his entire day putting out fires. First thing every morning he was assaulted by his two key employees with their major problem of the day. Things like, “So and so won’t be in today so I don’t know who’s going to help out on the counter. I guess it’ll have to be me.” Or, “We ran out of struts again, I guess I’ll have to run over to Bill’s place and see if we can borrow some.” When asked why the struts weren’t ordered, the owner was told, “Someone must have forgotten.”

In this environment, everyone does a little bit of everything and no one does anything completely. Cross-training your employees is good for the company and good for the employees when implemented correctly. When you have several drycleaning pressers who can efficiently press silks, pants and jackets, you have a lot of versatility in the plant.

When an individual is good at drycleaning finishing, shirt finishing and assembly, you have a great employee. If you have a great employee who is willing to do whatever it takes and you don’t manage that employee, you have chaos. Chaos costs money.

The solution. To make money, a company must run efficiently. To run efficiently, the right people have to be in the right place, at the right time, doing the right work right.

In our Case Study we have two key individuals who were given a minimum amount of direction from ownership. Therefore, to begin the solution, we created the position of Customer Service Team Leader (CSTL) on the Organization Chart.

Next, we developed a job description that laid out the responsibilities associated with the position of CSTL.

The job description details:

• How customers are to be greeted.

• Who is responsible for training new employees?

• Closing out their cash drawer at the end of their shift.

• Who reports to whom?

• Who covers for absent employees?

When an individual is given a position in an organization, they must be held accountable for the performance of their assigned area. What should the CSTL be accountable for?

• Proper scheduling so that the counter is neither over- nor under-staffed.

• Garments being properly priced.

• Tags must be securely attached to the correct location on each garment.

• Call office must be kept clean.

Conclusion. In the drycleaning business it is easy to be successful as long as sales continue to grow year after year. Sales volume has a nasty habit of hiding inefficiencies.

In slow times, when business is flat or declining, you must evaluate the daily performance of each employee. As demonstrated by this Case Study, you must establish standards and procedures in order for your employees to understand what is expected of them every day.

Knowing what is expected of them and why, gives them an opportunity to improve their individual performance. If they do not improve, you must remove these under-performers before they destroy your business.

By organizing his employees around the needs of his business and establishing performance standards in each department, this owner is now generating an eighteen percent (18%) return on sales. More importantly, for the first time, he can leave his business to take his family on vacations.

My business involves helping owners organize their business to run more efficiently. If you need help organizing the activities of your people around the needs of your business, don’t hesitate to call me.

In the game of business the more you know the better you can play the game… play to win!