Lufthansa Airline is Customer-Focused

by Thomas 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 president of the American Consumer Council, a non-profit consumer education organization that represents 85,000 consumers in North America and administers ACC's “Green C” Certification Initiative that promotes environmental compliance and sustainability for businesses, non-profit organizations, and government agencies. He can be reached at tom@americanconsumercouncil.org

Not Another Survey!

by William J. Kalmar

As customers, we have all come to understand the importance of customer surveys. Customers are the lifeblood of any organization and to achieve a certain level of success, the needs, wants, and expectations of customers must be understood. Role-model companies exceed the expectations of customers.

My take on the subject of customer surveys is fairly simple: No new product or service should be launched without first involving customers in a review process. Failure to do so could result in a process that is shunned by your clients or, worse yet, in customers flocking to another company.

The Checkbook Debacle
Let me give you an example of just such a scenario. When I worked for a large national bank, we prided ourselves in having an extensive training program modeled after the Malcolm Baldrige National Quality Award. The goal was to introduce every employee in the organization to the Baldrige criteria for performance excellence. The training went on for years, and we emphasized the concept of being in lock step with customers.

Somewhere along the line, we lost sight of this very important concept when it came to something as mundane as new checkbook orders. Our demand deposit department, in meeting with a vendor, learned that by eliminating one style of check reorders, the bank could save $500,000 a year. It meant that instead of offering side- or top-stub tear offs, we would only be offering checks that were attached to the stub across the top. Now $500,000 is nothing to take lightly, so it was full steam ahead to implement this new process.

Well, guess what? When customers began to reorder checks and discovered that their favorite way of tearing checks from the folder had been eliminated, there was an uproar. The branch offices were filled with irate customers, and phone lines in the customer service areas were swamped with customers threatening to move their funds to banks that offered both features.

Someone in management asked for the customer survey that was done before we made this change--of course, there wasn’t one. The bank quickly retrenched and again began offering both features for check reorders. The upside was that we used this as an example of what happens when customers are not brought into the brainstorming process. Weighing the loss of many customers and good will against a savings of $500,000 was a no-brainer.

Health care Focus Group:
As a follow-up to this concept of customer involvement, I recently participated in a focus group staged by a major health care company. The organization was exploring the introduction of some new products that would supplement Medicare. There were ten of us in the group--people who had just signed up for Medicare and others in the throes of reviewing their various options. I have participated in many focus groups over the years, and this one stood out: It was well organized, it kept on point, and it paid each of us $75 at the conclusion of the two-hour session. (Expediting the payment for our involvement was key in my accepting a role in the focus group, which I will expand on.)

As I participated in the roundtable discussion, my thoughts wandered off to this article on customer surveys. As a result, I concluded that more organizations should avail themselves of this technique before launching any new product or service. The participants represented a cross-section of the target audience, and the participants were allowed to voice opinions on subjects not originally outlined in the instructions. The health care organization came away from this with a clear understanding of the expectations of its customers.

Various Paths to Information
Other organizations have approaches to surveying customers as varied as the organizations themselves. In addition, we as consumers often look to the results of survey recommendations before we buy a particular product or service. How many of us have viewed a movie only because it was given “two thumbs up” by a certain pair of reviewers? How often have we eaten at a particular restaurant or stayed at a resort because a survey has designated it four stars? As consumers, we seem to depend on survey results to guide us to the best establishments. Let’s examine for a moment how some of these establishments entice us to participate in their surveys.

I mentioned earlier that the focus group I was involved with provided us with payment, as promised, at the conclusion of the session. In fact, being the cynical person that I am, my participation hinged on their paying me for my time and doing so at the end of the session. As a retiree I no longer offer advice pro bono.

Many companies conduct customer surveys on their receipts. Here is just a small sampling:

• OfficeMax--”Tell us about your shopping experience and enter to win one of five prizes.”

• Walgreens--”How are we doing? Enter our monthly cash sweepstakes. This month the prize is $3,000 cash.”

• Panera Bread (Saint Louis Bread Co.) --”Tell us how we are doing and you may win $2,000.”

• Montana ’s Cookhouse -- ”Please tell us about our serv ice and you could win $1,000.”

• Caribou Coffee Co. --”Tell us how we are doing. We would like to hear about your Caribou experience. Enter our monthly sweepstakes. Ten $100 Caribou Coffee gift cards awarded monthly.”

• Romano’s Macaroni Grill --”Win $1,000--a winner every week.”

• Meijer--”How are we doing? Rate your shopping experience and you may win a $1,000 gift card.”

Are you seeing a pattern here? These companies want our opinions, and if we participate, we may win a prize. Candidly, I am not inclined to assist them, because, as I mentioned earlier, I am somewhat mercenary: I want instant gratification. When I complete the survey, I want a coupon that I can download for a free coffee at Caribou, or a complimentary donut at Panera Bread, or a $5 coupon at a department store.

Here’s my quandary: While at each of these establishments, I have queried the employees about these surveys and information on any of the winners, and to date no one has been able to share with me the names of winners, or details of any payouts. Do I think that these promotions are bogus? Well, until someone comes forward to contradict it, my answer is yes! Therefore, don’t expect me to spend my time commenting on my veal piccata at the Macaroni Grill unless there’s a complimentary cannoli in it for me.

Some companies that have survey information on their receipt and promise nothing--Kohl’s, Macy’s, and On The Border, to name just a few--are saying, “We want your opinion and feedback, but unlike other companies who promise you a chance at a prize but may not deliver, we are being straightforward in telling you that there is no prize. The prize will be better customer service if you participate.”

These are what I would call after-the-fact surveys. I think a more effective way of exploring the needs, wants, and expectations of customers is to survey them while they are involved in the service or sampling the product. I call this method on-site, live surveys. A company that does it best in my estimation is the two-time winner of the Malcolm Baldrige National Quality Award--The Ritz-Carlton Hotel Co. Let me give you a recent example of this methodology.

It’s no secret that the “Ladies and Gentlemen” (as the staff are called) of the Ritz-Carlton constantly update a guest database that contains each guest’s special preferences. For instance, if a staff member notices that a guest prefers a specific wine, that information is entered into the database so that upon a return visit, a similar bottle of wine will be in the room upon check in. Permit me to provide you with a couple of personal examples.

While dining at our local Ritz-Carlton in Dearborn, Michigan, I opted for an appetizer of scallops. Our waitress overheard me remark to my wife, Mary, that “these are the best scallops I have ever eaten.” Evidently that information became part of the on-site, live survey information that was entered into the database, because every time we dine at a Ritz-Carlton establishment, I receive a complimentary scallop appetizer.

Then there’s the incident that occurred about a year ago that to this day still resonates with me. Mary and I periodically enjoy high tea at the Ritz-Carlton. It’s decadent, very soothing, and relaxing. On one occasion I requested extra finger sandwiches. Our waitress, a lovely lady named Anoushka, smiled and kept bringing me the sandwiches, much to my delight. Moving the calendar up two months found Mary and me enjoying another high tea. As we sat down, our waitress came up to us and said, “Anoushka is on vacation in Florida, but she called moments ago to make sure we provided you with extra finger sandwiches.” Now that’s service and an example of taking survey information to the next level. Is it any wonder that the Ritz-Carlton regularly ranks at the top of surveys when it comes to meeting and exceeding guests’ expectations?

Rather than survey guests at the conclusion of their stay, this hotel conducts surveys on an ongoing basis. This is a methodology that other companies should implement because it demonstrates to current customers that they are valued. The hotel also provides survey cards in each room.

Besides surveying customers about their services, many organizations hire mystery shoppers to conduct on-site reviews. I am one of those mystery shoppers. My responsibilities include visiting restaurants, fast-food chains, national department stores, and even a national transportation company. What I have been most impressed with is that clients take it as a given that their food is going to be delectable or that their products will be care-free, so the emphasis is on customer service. Naturally I review the food and the products, but the bulk of my report is about interacting with the employees. Absent great service, it doesn’t matter how good the food is or how sound the products. If employee service is mediocre, customers don’t return.

Conclusion
It is critical to be in lock step with your customers, and there are myriad ways to do so. Each organization needs to establish a pipeline of information from its customers and then make sure that those needs are met or exceeded so that the company will attain legendary status. Don’t get caught up in some money-saving gimmick without first surveying your customers.

Also, please don’t provide me with a receipt and a chance at a cash prize. If you want my opinion or feedback, I prefer a reward on the spot--a coupon for a free dessert or a free coffee would make my day.

Well, time to go. I have to complete a survey from the local hospital where I was a patient recently. They are offering a drawing for a free lobotomy. Who knows, it might just be on the level. If I win, it would be an opportunity to somehow put this dreadful, frigid, Michigan winter out of my mind.

About the Author:
William J. Kalmar has extensive business experience, including service with a Fortune 500 bank and the Michigan Quality Council, for 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 Detroit Chapter of ASQ. Now semi-retired, he’s a freelance writer for the Detroit News and other national newspapers; serves on the USA Today vacation panel; writes a monthly column for Mature Advisor newspaper; writes a monthly column titled “Hammock Thoughts” for Quality Digest’s e-newsletter QualityInsider ; is a mystery shopper for several companies; is a frequent presenter and lecturer; does radio voice-overs; and competes in duathlons.

The United States Air Force Shoots Down Boeing

by Tom Hinton

Last week I watched the Congressional hearings on why the U.S. Air Force awarded a contract to Northrop Grumman Corporation and EADS North America to build its next-generation of aerial refueling tankers. The contract is estimated at $40 billion, and the deal includes 179 planes to be delivered over the next 15 years.

The Air Forces opted to give the new kid on the block a chance over the more experienced Boeing Company which has been building air tankers for 75 years and recently unveiled its new, state-of-the-art KC-767 which has already been delivered to Italy and will soon be delivered to Japan. What do these countries know that our own United States Air Force doesn’t?

For the record, EADS is part of Airbus, the foreign-owned and heavily subsidized aerospace giant. It is also The Boeing Company’s toughest competitor for military and commercial airplanes. It should also be noted that the initial Air Force contract will create an estimated 20,000 jobs -- including several thousand jobs in Alabama and Kansas -- while costing Boeing and its suppliers approximately 20,000 jobs in the state of Washington and other locations where is has facilities and suppliers who would build the KC-767 air tanker.

The Boeing Company estimates that if the Air Force moves forward with the contract award to Northrop Grumman and EADS -- and Congress approves the bid award -- some 40,000 jobs (current and new positions) will be affected in the United States. The EADS tanker airframe is based on an Airbus A330 commercial jet assembled in France; and, most of the assembly work would be done in Europe according to Northrop Grumman sources.

As I watched the congressional hearings I shook my head in disbelief. The U.S. Air Force’s top acquisition officers, led by Assistant Secretary Sue Payton, Lt. General John Hudson, and Program Manager Terry Kasten and answered the panel’s questions honestly and directly. They staunchly defended the bidding process, the contract review process, and the awarding of the contract based on the proposal criteria. But, they also acknowledged that certain criteria such as jobs and the economic impact to American workers, were not part of the proposal and, therefore, were not evaluated or considered as part of their review. As Assistant Secretary Payton told Congress, “jobs and economics are not part of the proposal criteria or bidding process.”

While I understand the Air Force must follow specific criteria and acquisition laws, it begs the question, why in the world is the U.S. Department of Defense undermining the American economy? This is like giving a child a loaded gun and then advising them not to shoot you! It makes absolutely no sense to the average American who is worried about jobs, industrial capacity, and making ends meet. Now, America's own military is shipping jobs overseas. I could understand their rationale if Boeing was incompetent, but it is not. In fact, Boeing’s Airlift & Tanker program continue to be recognized as a best-in-class company by no one less than the president of the United States who recognized The Boeing Company on two occasions with the Malcolm Baldrige Award, our nation’s highest presidential honor for workplace excellence.

So, let’s examine the impact of this decision and how it all came about. The current air tanker tango began in 2003 when Arizona Senator John McCain complained bitterly about pork barrel politics because the Air Force was about to award The Boeing Company a new air tanker lease contract. Never mind that Boeing had been building and supplying the Air Force with air tankers for over 50 years. McCain said the deal was wrong.

According to the Everett Herald, Senator McCain "nearly single-handedly killed Boeing’s multi-billion dollar deal" to lease 100 Boeing air tankers to the U.S. Air Force. As the Everett Herald explained, “In 2001, McCain's laser-like probe of defense budgets unearthed a $30 billion earmark to pay for leasing 100 KC-767 jets from Boeing -- without first following a competitive bid process. McCain’s criticism stopped the program three years later and caused a round of investigations that led to Boeing paying fines for its contracting practices, and major changes in the Air Force’s procurement and contracting procedures.

Subsequent federal investigations resulted in two Boeing executives, Chief Financial Officer Mike Sears and Darleen Druyun, a former Air Force Acquisitions official and then-vice president of missile-defense systems at Boeing, being fired for illegal actions relating to Air Force contracts. Druyun was also convicted of federal violations for her illegal actions and was fined and sent to prison.

Boeing's board of directors acted quickly after concluding Sears improperly offered Druyun a job in the fall of 2002 because Druyun worked for the Air Force. At the time, Druyun was reviewing the proposal for the Air Force to lease 100 Boeing 767 airborne-refueling tankers. Needless to say, these Boeing officials made a serious mistake and paid the price for their stupidity and illegal actions.

Boeing hired a new CEO and hoped the firings would convince Congress and the Defense Department that the company was acting decisively to right its ship. Then, the Pentagon stripped Boeing of $1 billion worth of satellite launches after another investigation showed the company used trade secrets stolen from Lockheed Martin, its chief competitor, to help win the launches. Instead of getting better, hings got worse for Boeing.

In March, Boeing Satellite Systems acknowledged it made improper technology transfers to China in the wake of two failed satellite launches in 1995 and 1996.

Finally, in 2006, when Boeing’s new chairman W. James McNerney, Jr. appeared before Congress and apologized at a Senate hearing for the company’s illegal and unethical tactics, and promised higher ethical standards, Senator McCain responded with praise for Boeing for "truly reforming and starting fresh."

But, the damage was done and Senator McCain had sent a clear signal to the U.S. Air Force Acquisition office -- no more deals with Boeing. That set the stage for a new round of air tanker bids which last week the Air Force awarded to Northrop Grumman Corporation and EADS North America. While the letter of the law was followed, it appears from circumstantial evidence that the U.S. Air Force had already made up its minds not to do business with Boeing’s Airlift & Tanker program.

In the midst of all these investigations and problems with a few bad apples at Boeing, Senator McCain and his colleagues forgot to ask one important question: “If not Boeing, who else will build the Air Force’s new air tanker?” But, McCain knew the answer was the Europeans and Airbus. He also knew his actions would cost some 20,000 Americans their livelihood. Certainly, McCain's tactics pushed the Air Force too far and caused them to avoid steer clear of doing business with Boeing. That's a serious mistake on the part of the Air Force and Senator McCain.

Rep. Norm Dicks, a powerful figure on the House Appropriations Committee, who represents the Everett, Washington area which his home to many of Boeing’s aerospace workers, predicted a "firestorm of criticism on Capitol Hill" over sending so many jobs overseas. Rep. Dicks added of McCain: "I hope the voters of this state [Washington] remember what John McCain has done to them and their jobs."

Some people suspect that this was “payback time” for The Boeing Company. But, Assistant Secretary of the Air Force Sue Payton said in her testimony that previous contracting issues and illegalities with Boeing had no bearing on the 2008 air tanker award. She indicated that Northrop Grumman Corporation and EADS North America won on the merits of their plane, a modified Airbus A330 that is bigger than the modified KC-767 that Boeing offered. Payton also noted that by law, the Air Force must consider European allies on equal footing with American manufacturers.

Assistant Secretary Payton is referring to laws such as The Buy American Act (41 U.S.C. § 10a–10d) which was passed in 1933, mandating preferences for the purchase of domestically produced goods in direct procurements by the United States government.

The section of The Buy American Act that the U.S. Air Force referenced in terms of the air tanker contract is an outdated provision which stipulates that foreign companies can be considered when “purchasing the material domestically would burden the government with an unreasonable cost (the price differential between the domestic product and an identical foreign-sourced product exceeds a certain percentage of the price offered by the foreign supplier), if the product is not available domestically in sufficient quantity or quality, or if doing so is in the public interest…”

Given the fact that The Boeing Company already has built a new air tanker, The Buy American Act is ridiculous and works to the detriment of America’s economy and declining manufacturing base. While the U.S. Air Force must adhere to the law, Congress should move immediately to strike The Buy American Act and ask the Air Force to re-bid the job so that Boeing has a fair chance -- assuming fairness is even possible given the McCain bias against Boeing now rooted in the U.S. Air Force.

It;s important to note that EADS, is a European entity that is heavily subsidized by foreign governments. The Boeing Company does not enjoy any government subsidies, so the playing field is not level. Already, the competition is unfair. The Boeing Company cannot compete fairly against such rules and antiquated laws that work against the competitive spirit of American businesses.

Another concern was raised by Congressman Dicks, who accused the Air Force of “bait and switch tactics” by telling Boeing that the Air Force wanted a medium-sized tanker, not a larger tanker which Airbus proposed. Then, the Air Force accepted a larger aircraft from Airbus, the modified A330. “Had Boeing known that the Air Force wanted a bigger jet, Boeing would have bid the 777," Rep. Dicks said at the Congressional hearing last week.

Interestingly, while Boeing was building the KC-767 tankers for Italy and Japan, it asked the Air Force if it wanted something bigger in its new air tanker -- like the Boeing-777. The Air Force told Boeing no, But then, the Air Force proceeded to select a tanker based on the airbus A330 specifications which is larger than Boeing’s 767 and almost as large as the 777. This is why Rep. Dicks accused the Air Force of “switch and bate” tactics -- accusing the Air Force of saying one thing to Boeing but doing another in dealing with Northrop Grumman Corporation and EADS North America. It appears the Air Force was not dealing honestly with Boeing because of the pressures from Senator McCain.

In awarding the new air tanker to Northrop Grumman Corporation and EADS North America, other questions have been raised by aviation experts as to whether the Airbus A330 is going to fit into Air Force infrastructure including airplane hangars that currently house KC-135's that use half the space. When the two planes are compared size-wise, the wingspan of the airbus is 42 feet wider than the 767. The airbus plane is also 34 feet longer and seven feet taller at the tail.

"You're going to need massive construction plans to rebuild hangars at airbases all over the world," complained Rep. Dicks.

Secretary of the Air Force Wynn defended the contract decision and told senators the planes were judged on nine key criteria and "across the spectrum, all evaluated, the Northrop Grumman airplane was clearly a better performer." In addition, he said the Boeing proposal was judged to be more risky and more expensive.

But, this statement also raises questions among Aviation experts who noted that the Boeing contract bid was considerably lower than the EADS bid, and the Boeing aircraft is already operational while the airbus KC-45A is still is the design phase.

Also, it has been noted that Boeing’s Airlift & Tanker program has won the prestigious Malcolm Baldrige Award for its quality and overall excellence.

The Air Force has complained that it is still flying Eisenhower-era air tankers built by Boeing and it needs to replace its aging fleet as soon as possible. If this is the case, experts ask, why delay the process when you already have a reliable, state-of-the-art air tanker being built by Boeing?

Finally, what about American jobs being shipped overseas to build a U.S. Air Force air tanker? Does this make any sense given the state of our economy and the need for skilled aerospace workers such as those employed by Boeing?

Responding to criticism of the contract award, Northrop Grumman officials said the KC-45A tanker will produce 2,000 new jobs in Mobile, Ala., and support 25,000 jobs at suppliers nationwide. The EADS/Northrop Grumman team plans to perform its final assembly work in Mobile, although the underlying plane would mostly be built in Europe, and it will use General Electric Co. engines built in North Carolina and Ohio.

While Northrop Grumman Corporation and EADS North America are good companies, this decision has made many Americans angry, and rightfully so. It smacks of politics and unfair competition which is exactly what the U.S. Air Force should be avoiding.

Boeing’s past acquisition mistakes have been corrected and paid for, literally. Boeing has been under new, leadership since 2006, and Boeing’s Airlift & Tanker program is second to none in terms of quality, business practices, and overall management excellence. If the United States Air Force is prohibited from considering economic factors, certainly the United States Congress and White House need to get their heads out of the clouds and step-in to make sense of this decision before Northrop Grumman Corporation and EADS North America fly away with American jobs and taxpayer dollars!

About the Author: Tom Hinton is president of the American Consumer Council. He can be reached at: tom@americanconsumercouncil.org

Southwest Sacrifices Airline Safety for Profits

by Tom Hinton

Over the years, I’ve admired Southwest Airlines for doing things right. It seemed that when other airlines were lowering their standards and compromising their commitment to service and quality, Southwest Airlines struck to its knitting and honored its words and promises to customers. In the process, Southwest created a successful and profitable airline. By offering low fares, frequent flights, a strong safety record, and motivated employees -- who had fun on the job and cared for their customers -- Southwest Airlines became one of America’s most admired companies and desirable places to work.

Now, Southwest is under fire by Congress, consumer groups, and the FAA for allowing more than 100 un-inspected planes to fly despite the fact that some planes had cracks in their fuselages. Four jets were found to have four-inch cracks requiring immediate repair. Six jets had signs of cracks starting to show.

Southwest admits that it allowed its planes to fly with cracks, but denies that it ever placed its crew or passengers in jeopardy. In a statement addressed to its customers, Southwest Airlines said, "We assure our customers that this was never a safety of flight issue." Aviation experts told NBC News that the early damage would not be catastrophic, but cracks could lead to serious problems.

Inspections of airplane fuselages became mandatory in 1988 after an Aloha Airlines Boeing-737 jet cracked open at 24,000 feet while enroute from Honolulu to Hilo killing a flight attendant and injuring seven of the 89 people aboard. Ironically, a passenger noticed a sever fuselage crack as she stepped aboard the Aloha Airlines jet in Honolulu, but never mentioned it to the flight crew.

To its credit, Southwest discovered the inspection oversight and notified the FAA. But, for reasons not explained, Southwest continued to fly the un-inspected planes on more than 1,400 flights. Federal law requires that planes be grounded until they are in compliance. Southwest cooperated with the FAA throughout the inspection process and told the media is was surprised when the FAA proposed a $10.2 million fine for violating federal regulations.

Is this just a series of misunderstandings and communication breakdowns, or is it -- as the head of a congressional committee suggests -- collusion between the FAA and the airlines it’s supposed to regulate?

Rep. James Oberstar, who chairs the U.S. House of Representatives’ Transportation and Infrastructure Committee, believes the FAA and the airlines have become too cozy. Oberstar said the committee's investigation was begun after two whistleblowers approached congress after years of trying to correct the inspection problems.

Oberstar called for the FAA to "clean house from top to bottom.” According to Rep. Oberstar, “the relaxed relationship between the FAA and the airlines have led to the sort of lax enforcement that allowed Southwest Airlines to fly at least 117 aircraft past mandatory inspection deadlines.”

Oberstar also said he believes similar violations may have occurred involving other airlines, but that those persons who have such evidence are afraid to come forward. What does this disturbing situation say about the integrity of senior management at the airlines and the independence of regulatory agencies like the FAA? Should consumers be worried? The short answer is a resounding yes! The reason is a lack of trust and integrity on the part of airline executives and the FAA.

When government agencies such as the FAA, the U.S. Consumer Product Safety Commission, the Food and Drug Administration, and the U.S. Department of Agriculture are compromised to the point where leaders fail to lead objectively, and government inspectors fail to perform their duties and uphold the sacred public trust, it is time to “clean house” and change the culture of those organizations as Rep. Oberstar suggests.

What is happening here is more serious than just coziness and a few omissions by business leaders and government agencies. What is happening here is a blatant disregard for consumer safety and the welfare of our citizens. If warranted, the Department of Justice and federal prosecutors should be asked to investigate and bring criminal charges against those government officials and corporate leaders who knowingly abused the law and abdicated their sworn responsibility to the public by placing an unsuspecting public in danger. In China, they shoot officials who disgrace their office and disregard the public good! While such penalties are extreme, a harsh message needs to be sent to those men and women we have entrusted with the safety of our airlines, drugs, food supply, and products. That message is simply this: honor your oath by doing your job; and, uphold the laws you swore to obey and enforce. If you cannot do this, quit your job. If you fail to uphold the laws, you run the risk of federal prosecution and prison.

I believe this is where the Southwest Airlines incident crosses the line. When airline executives knowingly thwart the law and risky public safety, it is criminal intent. You cannot convince me that Southwest Airlines, which is managed by hundreds of intelligent and competent people, overlooked one of the basic safety issues of an airline -- compliance with FAA inspections. It is no longer a matter of sloppy documentation and lax oversight; it is criminal behavior on the part of Southwest Airline executives and FAA inspectors who looked the other way. Rep. Oberstar is correct in calling for a top-to-bottom investigation. In order to stop these types of blatant violations, it will require much more than a slap on the wrist. Southwest and the FAA must be held accountable to the full extent of the law.

About the Author: Tom Hinton is president of CRI Global, LLC, a training and consulting firm that helps its clients create a “Culture of Excellence” in the workplace. He is the author of four books and a popular speaker at corporate and association meetings. For information, email him at: tom@criglobal.com or visit: www.tomhinton.com

What Makes a Good Employee?

by Bill Kalmar

May I have the envelope, please!

Each year at this time a momentous event is announced in the pages of a prominent magazine. No, I’m not talking about the Sports Illustrated swimsuit edition, although thoughts of that warm me up on frigid evenings in Michigan (sorry if that’s sexist). I’m referring to Fortune Magazine’s announcement of “The 100 Best Companies To Work For.”

For us quality and customer-service geeks it’s an opportunity to examine the inner workings of some of the best organizations in our nation. For the companies who applied for this recognition it’s a guessing game to see where they rank among some of their peers and who is labeled No. 1.

Ever since this list was first published I’ve been following and reviewing these companies like a broker follows blue chip stocks or a wine connoisseur absorbs Wine Spectator’s list of the top bubbly. We all want to work for an organization that espouses sound customer-service processes and provides employees with a safe, challenging, rewarding environment. Fortune Magazine lists those companies.

After the list is published each year, the featured companies are flooded with unsolicited applications. In fact, in the current edition of the list there’s a section entitled, “How To Get Hired By A ‘Best’ Company.” As the author points out, “Looking at the past decade, our top 25 each year have averaged job growth of 14 percent.” The author goes on to mention that it helps to know someone at the company, because thousands of people submit applications. Before it opened in 2006, the Doha Hotel in Qatar received 25,000 applications for 600 positions.

Before we get into the specifics of these companies, let’s first examine how they were chosen. There’s that special moment in the Oscar awards program where two or three sartorially correct accountants come out on the stage with a briefcase containing the envelopes naming the winners for the evening. Of course we learn how the balloting was done. So in imitation of the Oscars, here’s how “The 100 Best” were selected:

“More than 105,000 employees from 446 companies responded to a 57-question survey. Two thirds of a company’s score is based on the survey, which is sent to a minimum of 400 randomly selected employees from each company and asks about things such as attitudes toward management, job satisfaction and camaraderie. The remaining third of the score comes from an evaluation of each company’s responses to a culture audit which includes detailed questions about demographic makeup, pay and benefits programs, and open-ended questions about the company’s people-management philosophy, internal communications, opportunities, compensation practices, diversity programs, etc. About 1,500 companies participated in the survey. Any company that is at least seven years old with more than 1,000 U.S. employees is eligible.” (Courtesy of FORTUNE magazine)

I have used this listing in my presentations to illustrate the attributes of these organizations. In that regard, I first shared the following 12-point list with QualityInsider readers in “The Corporate Running of the Bulls.” Interspersed with that list are examples from the “100 Best” list:

What makes the “100 Best Companies To Work For” so great:

They make people feel that they’re part of a team or, in some cases, a family.

• With an average salary of $90,083, the 1,376 employees of American Fidelity Assurance call this Oklahoma insurer their “second family.”
• National Instruments yearly stages an employee-appreciation week with executives serving breakfast and culminating in a family outing day.
• Nugget Markets throws a year-end bash, and in 2007 took all of its 1,322 employees whitewater rafting.
• In 2007, as is the case every year, the Plante & Moran team gathers at its annual conference, an opportunity to bond. Partner Jeff Jenkins stated that the theme was to “amp it up,” which means that in workplace and with client relationships and in family-oriented activities, the staff was asked to ratchet it up another notch while living the “golden rule” (i.e., treat others as you would like to be treated) More energy results in better client service, a more enriching work environment and better results.

They encourage open communication, informing their people of new developments and encouraging them to offer suggestions and complaints.

• The CEO at Adobe Systems answers employee e-mails within 24 hours and employee councils feed management with ideas.
• After feedback from employees, SRA International switched insurers, added health savings accounts and adoption aid, and increased 401(k) matches.
• Four times a year employees at Nike are invited to an all-employee meeting where feedback and suggestions are encouraged.
• The head of Yahoo hosts monthly chat ’n’ chow lunches with employees and even answers employee questions online.
• Perhaps the lowest turnover rate in the hotel industry (18 percent) is attributed to J. W. Marriott Jr.’s visits to 250 Marriot properties each year and meeting with employees.
• Cisco Systems uses an employee feedback/suggestion system, “On My Mind.”

They promote from within, letting their own people bid for jobs before hiring outsiders.

• Eighty-five percent of managers at supermarket Stew Leonard’s were hired in house. This supermarket has been featured in many of quality guru Tom Peters’ columns. Here’s a bonus: CEO Stew Leonard Jr. has a surefire way to determine the strength of the economy: “I look for the mashed-potato effect. If customers are buying our freshly-prepared mashed potatoes instead of whole potatoes, then the economy is doing well. Lately, bulk potato sales have been going up, so there’s a concern about where the economy is going.” The so-called experts can cackle about their charts and their prognostications, but for me, I’m focusing any investments I might make on the “mashed-potato” metric.
• At S.C. Johnson & Son more than half of employees are over age 45, 28 percent have worked there more than 20 years, and 78 percent more than six years.
• Twenty-three percent of Herman Miller’s workforce are “Water carriers,” employees who have 20 or more years with the company.

They stress quality, enabling people to feel pride in the products or services they provide.

• Quick action by Mattel in recalling defective toys from China illustrated this company’s focus on quality and safe products.
• Granite Construction has a zero-accident goal and employees are rewarded, not fired, for bringing attention to unsafe situations.

They allow their employees to share in the profits through profit sharing, stock ownership, or both.

• Ten percent of employees’ pay is deposited into 401(k)s at Booz Allen Hamilton.
• Workers at Stanley own at least 50 percent of the company.
• How about a 43-percent stock price rise at EOG Resources, where all employees have stock options.
• Intuit offers all new employees stock options.
• Of the 3,558 employees of PCL Construction Enterprise, 2,200 employees own shares in the company, and many received dividend checks last year in excess of their annual salaries.

They reduce the distinctions of rank between top management and those in entry-level positions, and they bar executive dining rooms and exclusive perks for high-level people.

• Everyone gets overtime pay at David Evans & Associates.
• No one earns more than 10 times anyone else at TDIndustries.

They devote attention and resources to creating as pleasant a workplace as possible.

• Because during tax season the workplace is home six days a week for employees of Plante & Moran, management has designed a building with staff in mind: Custom wood stain throughout the entire building, work stations designed by focus groups, each staff member has his or her own space with a nameplate, and in the front lobby a huge assortment of flowers is replaced weekly. Dan Essad, human resources senior manager stated it best when he was interviewed recently by reporter Carol Marshall for the Oakland Business Review: “We care for our clients, we care for our employees, our community, our families, and that caring is reflected in our space.”

They encourage their employees to be active in community service by providing money to organizations in which employees participate.

• Every employee at Intuit receives four days off with pay each year to perform community service.
• Umpqua Bank provides 40 hours of paid time yearly for employees to volunteer in the community.

They help employees to save with matching funds.

• Aflac boasts a 401(k) matching fund.
• Seven and a half percent of salary is offered as profit sharing at Arnold & Porter.
• Genentech bumped up 410(k) match in 2007—100 percent up to 5 percent of pay.
• Here’s quite a bonus from Boston Consulting Group—15 percent of pay deposited in a retirement plan.
• Alcon Laboratories has the richest retirement program in U.S. business with employee contributions matched 2.2 to 1.
• A 15 percent of pay contribution by Russell Investments is part of their automatic profit sharing.

They try not to lay off people without first making an effort to place them in other jobs, either with the company or elsewhere.

• American Express had 6,000 internal job moves last year.
• There’s a no-layoff philosophy at FedEx.

They care about the health of their employees, sometimes providing physical fitness centers and regular exercise and medical programs. (This was a perk provided by too many companies to mention. This is a sampling.)

• Healthways has walking trails, bikes for rent, and easy-to-locate stairways to encourage exercise.
• Certainly this was to be expected—Nike has a decathletes dinner every year.
• Tennis and basketball courts are provided by AstraZenica.
• eBay has hired a full-time staff of personal trainers and nutritionists.
• A pool, cardio room, a racquetball court, putting greens, and horseshoe pits can be found at SAS Institute.
• At Goldman Sachs, where the average salary of $137,000 keeps people financially healthy, you will also find rock climbing, a martial arts boot camp, massage therapy and Pilates. Even with the over-the-top salaries paid here, the company will even outfit you with workout duds.

They expand the skills of their people through training programs and reimbursement of tuition for outside courses.

• Tuition reimbursement of up to $20,000 and bonuses for advanced degrees, which 65 percent of MITRE employees have, makes this a company that encourages learning.
• Let’s not undercut what Station Casinos is doing—free dealers school for staffers wanting to advance and gain new skills.
• Johnson Financial Group offers a graduate tuition reimbursement up to $10,000.

No. 1 is Google, which prides itself on having fun and minting millionaires. The stock just rose above $700 and 99 percent of employees have stock options.

There you have it. So update your resumes and start campaigning for that new job, unless you are fortunate enough to work at one of these extraordinary companies. I’m just pleased that all of you are still working and supporting my social security and Medicare.

P.S. Finally, for those of you who are anal-retentive like me, I did mention in last month’s column that I would report on two recent books, The Three Signs of a Miserable Job (Patrick M. Lencioni, Jossey-Bass, 2007) and one about General Electric—Jacked Up (Bill Lane, McGraw-Hill, 2007). I suspect that some of you have been searching for that. Rest assured that will be in next month’s column. I thought learning about the best companies better served me and you than harping on a miserable job. I hope you agree.

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 Detroit Chapter of ASQP. Now semiretired, he’s a freelance writer for the Detroit News; writes a monthly column for Mature Advisor newspaper; is a mystery shopper for several companies; is a frequent presenter and lecturer; does radio voice-overs; and competes in duathlons.

Editor's Note: This article appeared in the March issue of Quality Digest Magazine which can be accessed at: www.qualitydigest.com

Tips on Fighting Identity Theft

Courtesy of North Island Credit Union's Island Business Connection Newsletter, Winter 2008 issue

Nearly 10 million people were victims of identity theft last year and the incident rate is doubling every two to three years. North Island Credit Union encourages its members and other consumers to take steps now to reduce exposure to these crimes that cost the average victim 175 hours of personal time and $1,500 to correct.

One of our sponsoring member credit unions, North Island Credit Union of San Diego, California, recommends that you take several steps to protect your identity. First, make it difficult for criminals to obtain your social security number (SSN), your birth certificate, and all financial information. Treat these items like you would valuable jewelry. If you don't use them, don't carry them around with you. Keep them under lock and key. If someone requests this information in person, by phone, mail, email, or on a web site, you need to determine if it is a legitimate request. It's always better to politely refuse and stand fast in your resistance to share this information. [Note: the American Consumer Council and the California Consumer Council never ask for a member's SSN or checking account information].

If the medical insurance card in your wallet shows your SSN or that of another family member, ask your insurer to provide you with a card that does not contain your SSN. Alternatively, carry a photograph of the insurance card with only the last four digits of your SSN.

Given the number of financial statements, loan documents, and credit offers that arrive in the mail every week, we recommend that you rent a Post Office box, or have a locking mailbox at your home or business for confidential incoming mail. We also encourage our members to be careful with outgoing mail. Take it into the post office. Don't leave outgoing mail with payments and other financial information in an unsecured place. It's better to be safe than sorry.

In terms of paying your bills online, this actually has become one of the safest ways to conduct financial transactions provided the online merchant has encrypted software that prevents hackers from stealing your information in transit. Most of the established online payment systems are able to protect against identity theft thanks to sophisticated firewalls which they built into their software systems.

On that note, always be suspicious of an unsolicited email that asks you to provide any financial information. There are lots of scams out there and it's always better to "junk" these emails or telephone your financial institution (always use the number of the back of your credit card -- never use the the telephone number in the email) first before you ever give out confidential financial information or your SSN. Remember, most reputable financial institutions do not email you asking you to share your confidential financial information.

Also, it's safer to use a credit card than a debit card when buying items online. Also, we recommend that you use one credit card for all of your online transactions since it's easier to track any fraudulent activity this way.

Under federal law, you are entitled to receive a free credit report every 12 months from all three of the major credit bureaus. This includes toll free calls to: Experian, 888-397-3742 -- www.experian.com; Equifax, 800-437-4619 -- www.Equifax.com; and, TransUnion, 800-916-8800 - www.transunion.com Or, you can visit: www.annualcreditreport.com for more information on how to obtain a free credit report.

If you find any questionable charges on your credit report, immediately contact the financial institution or credit card company that processed the transaction to review the charge. Again, use the telephone number on the back of your credit card or credit union statement to contact the appropriate financial institution.

You also can file a complaint with the Federal Trade Commission at toll free: 877-438-4338; www.consumer.gov/idtheft; and, with local law enforcement or the US Postal Inspector. We encourage you to do this since fewer than 60% of identity theft victims do not notify law enforcement of the crime against them.

Finally, we strongly recommend that you shred all outdated financial documents before throwing them in the trash. This includes tax documents, credit card statements, credit union statements, old checks, and expired credit cards.

Remember, the key to protecting your identity is to make it very difficult for thieves to steal it!
For more information, please visit North Island Credit Union's Center at www.myisland.com

Some Unfinished Business

by Bill Kalmar

When finalizing my plans for a new year, it’s always gratifying to realize that all previous plans have been completed. As I recently went through this annual process, I noticed several issues affecting customer service and quality that I’d inadvertently left on the back burner. Consider this an early spring cleaning. With 10 inches of snow on the ground here in Michigan, it also prompts me to dream of warm weather and green, luscious golf courses.

Maybe it’s symptomatic of my being a senior citizen, but little things are beginning to aggravate me. As a starter, traipsing through the whole Medicare registration process is a calamitous journey that isn’t for the faint of heart. One needs a cadre of physicians, pharmacists, and legal beagles to assist in the navigation. It’s similar to a take-home exam, except most of the answers are not in the book. One can only hope that when the complicated package is completed, the road taken is a clear path to reduced health care costs and not some side road to confusion and refusal to provide reimbursement. Evidently meeting and exceeding the expectations of customers has yet to reach the Medicare process.

To make matters worse, it’s virtually impossible to contact any of the health care industry so-called “customer service centers” by phone to guide you through this process. Let me explain.

Several weeks ago, my wife, Mary, and I were at a local shopping center when I decided to contact one of these customer service centers. I called an 800-number and spoke to a delightful young lady who gave me the address of a center that was in the vicinity of the mall. Asking for the phone number presented the first impasse—I was told that the center doesn’t accept phone calls. Fair enough. Just give me directions from the mall to the service center because I had no idea how to get there. The delightful young lady had no idea on directions so I again asked for the phone number. This presented the second impasse.

I was politely informed that she wasn’t authorized to release the phone number and neither was anyone else in the office. I then asked for a supervisor and was told that a supervisor would call me shortly on my cell phone.

Mary and I then left the mall and went to a local restaurant for lunch. There we received a phone call from a health care supervisor who reminded me that not even supervisors were allowed to release phone numbers of these customer service centers. Being the politically incorrect person I am, I suggested that the governor’s office has a listed phone number, the White House handles calls, and I even have a 13-digit phone number for the Vatican. “Are the people in the customer service center more important than the Pope?” I asked and was given a polite “No,” but still no phone number. “Don’t the people who work in the office receive phone calls from spouses, children, and relatives?” Again the polite answer was, “I can’t answer that.”

Here’s where it gets zany. The supervisor asked me for the address of the restaurant where we were dining. When I inquired about the reason, she stated that she would provide me with Map Quest directions. After getting the address from a curious hostess who wondered why I needed the address of a location where I was already ensconced, I provided it to the supervisor. Sure enough, five minutes later I received a call back. Her opening words were: “First of all take a right hand turn out of the driveway. And there are eleven other instructions I will give you”.

Wouldn’t you think that just giving me the phone number would have avoided all this? My caustic comment stating “Is this what you do as a supervisor—preparing Map Quests for customers” didn’t sit well with her, but frankly I couldn’t blame her based on my condescending air.

I suggested that maybe a phone number could be provided for all these customer service centers in the state with a recording that states: “We do not accept phone calls but here are our hours and we are located between American Way and Customer Drive just north of Quality Street.” She took it under advisement.

When we finally located the office, the people were personable and professional. Guess what? All of them had phones. Go figure!

While I still have a burr in my saddle blanket, let’s discuss the issue of magazine subscription renewals. For years I have religiously renewed my periodicals after receiving a notice in the mail. I just assumed that it was time to renew. Some of the offers were too enticing to pass up, such as “pay for one year and receive the second year free” or “pay for one year and send a complimentary subscription to a friend.” I guess during these renewal times I neglected to thoroughly examine the mailing label to determine the expiration date.

Just recently I performed this tedious task on several publications I subscribe to and what a shock. One subscription doesn’t expire until the year 2012. It might just outlive me! Maybe I should make it part of my will so that I can pass it on to my children. Whatever the case, you can be sure I will be meticulous in reviewing expiration dates in the future before succumbing to another renewal notice. I realize that this is just part of good customer service but receiving a monthly copy of American Girl long after our children have flown the coop is a bit over the top for me.

Then there are restaurants putting cutesy monikers on restroom doors just to confuse us senior citizens. This seems to happen more frequently in themed restaurants. For instance a recent visit to the restroom in a seafood restaurant became an adventure. One door was marked “grouper” while the other was labeled “tilapia.” I opted for the “grouper” and fortunately made the correct choice.

I have been in restaurants in northern Michigan hunting country labeled “buck” and “doe” or “mallard” and “drake” and that doesn’t distress me. Or a country-dance emporium with “gents” and “gals” is fine. But when I’m under some pressure to enter the confines of commode headquarters is it necessary for me to understand the sexes of other species? I sure hope not.

Several months ago, I was at a restaurant that had clearly labeled the restroom doors as “men” and “ladies.” Just to confuse me, the other side of the door facing into the restroom was labeled “ladies.” Maybe some type of magical transformation was to have taken place inside, and for a moment I was discombobulated and looked around to make sure I was in the presence of other males. In any event, as a senior citizen it may be time to circumvent all these mind boggling choices and just bring a supply of Depends. When I’m searching for a restroom I really think that expecting me to take a quiz is unreasonable. The next time I’m in that situation, maybe the health care supervisor I mentioned previously could provide me with Map Quest directions.

I saw something interesting the other day about my favorite airline—Southwest Airlines. It seems the airline took a third-quarter pretax charge of $25 million for an early-retirement program. Here’s what caught my attention: Of the 8,500 employees eligible for retirement, only 606 accepted the offer. Having followed the culture and accomplishments of this airline for many years, I’d like to think that the majority of employees are extremely satisfied with their jobs and decided to stay on. The other option is that the offer was stingy, but until proven otherwise I can’t fathom that. In my estimation it’s still the best managed, most customer-friendly airline in the skies.

That pretty much clears off my back burner. I’m currently reading two new books: The Three Signs of a Miserable Job (Jossey-Bass, 2007), by Patrick Lencioni, and Jacked Up (McGraw-Hill, 2008), by Bill Lane, who was Jack Welch’s speech writer at General Electric for 20 years. The latter book has some interesting comments about why Welch ushered out Gary Wendt, the former head of GE Capital. Suffice it to say that “flatulence at meetings” isn’t an attribute that was high on Welch’s wish list.

Blog Note: This article appears courtesy of the Author. It also appears in Quality Digest.
Copyright © 2006 QCI International. All rights reserved.
Quality Digest can be reached by phone at (530) 893-4095.

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 Detroit Chapter of ASQP. Now semi retired, he’s a freelance writer for the Detroit News; writes a monthly column for Mature Advisor newspaper; is a mystery shopper for several companies; is a frequent presenter and lecturer; does radio voice-overs; and competes in duathlons.