Have you ever wondered what truly powers a thriving workplace? Join me and my good friend Kurt Pease, as we unravel the impact of employee engagement and recognition on the vitality of a business. Kurt, a seasoned expert in harnessing the potential within teams, shares his wisdom on creating a culture of appreciation that goes beyond the bottom line. Together, we explore the generational shifts in workplace dynamics and how a simple "thank you" can revolutionize employee retention and performance, inspired by the insights of Lou Holtz on the essence of motivation.
Embarking on an unexpected career path can often feel like stepping into the unknown, but it's within these moments of uncertainty that we discover our true potential. I'll take you through my own journey of professional transformation, from the hurdles faced in a Mexican maquiladora to the learnings gleaned at John Deere. This episode isn't just about the challenges; it's a reflective look at using 'healthy stress' to fuel growth, examining how the elite perform under pressure, and how these experiences shape our philosophical approach to life's ticking clock.
Lastly, we're peeling back the curtain on the construction equipment industry to reveal a goldmine of opportunity often left untapped—equipment maintenance. I'll break down why major brands like Caterpillar, Komatsu, and John Deere see only a fraction of their customers returning for maintenance, and how the shift to an hourly billing model is changing the game. As we dissect the psychological pricing strategies employed in car sales, we'll expose the mechanics behind why customers end up spending more than they intended. It's an eye-opening look at the art of the deal in sales, and a reminder that the real value often lies in the services around the product.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Have you ever wondered what truly powers a thriving workplace? Join me and my good friend Kurt Pease, as we unravel the impact of employee engagement and recognition on the vitality of a business. Kurt, a seasoned expert in harnessing the potential within teams, shares his wisdom on creating a culture of appreciation that goes beyond the bottom line. Together, we explore the generational shifts in workplace dynamics and how a simple "thank you" can revolutionize employee retention and performance, inspired by the insights of Lou Holtz on the essence of motivation.
Embarking on an unexpected career path can often feel like stepping into the unknown, but it's within these moments of uncertainty that we discover our true potential. I'll take you through my own journey of professional transformation, from the hurdles faced in a Mexican maquiladora to the learnings gleaned at John Deere. This episode isn't just about the challenges; it's a reflective look at using 'healthy stress' to fuel growth, examining how the elite perform under pressure, and how these experiences shape our philosophical approach to life's ticking clock.
Lastly, we're peeling back the curtain on the construction equipment industry to reveal a goldmine of opportunity often left untapped—equipment maintenance. I'll break down why major brands like Caterpillar, Komatsu, and John Deere see only a fraction of their customers returning for maintenance, and how the shift to an hourly billing model is changing the game. As we dissect the psychological pricing strategies employed in car sales, we'll expose the mechanics behind why customers end up spending more than they intended. It's an eye-opening look at the art of the deal in sales, and a reminder that the real value often lies in the services around the product.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Aloha and welcome to another Candid Conversation, and I'm joined today by a fellow I've known since forever, whose name is Kurt Pease. He lives in Colorado, and we're going to have a conversation that touches on, I think, one of the most important aspects of our lives and our work how you get employees engaged in their business. So, kurt, welcome, congratulations. I love you in Colorado, man.
Speaker 2:Well, thank you, ron. I appreciate the introduction and certainly we have known each other for a long time. And, ron, thank you for inviting me this morning to this conversation. And, ron, thank you for inviting me this morning to this conversation.
Speaker 1:You're very welcome. Kurt wrote a blog for us about employee engagement and rewards and the very first article I wrote for the AED back in the 90s was headlined who Are your Heroes? And it was the people that touched the customers and how they were underappreciated, undervalued. And Kurt, to make a big circle out of it, tell us what the genesis was, what the thinking was that got you to write about a reward program for employees, because it's wonderful well.
Speaker 2:Thank you, ronnie.
Speaker 2:It's something that is I'm very passionate about and, don't get me wrong, I've had, um, you know, reward recognition for employees I think has been important all through my career.
Speaker 2:I've seen it in within different companies, but probably until my last true career change, and that was with the dealer, the John Deere dealer, here in the front range, that I understand how important it was. And recognizing what happened when you took away or didn't have a formal recognition program and, ron, during my, you know, with the blog that I had written, it really came to light when we started seeing such a higher attrition rate than we were used to within our company, because we always believe and truly are a great place to work. But you know, after spending some time doing exit interviews, I found that many of those people leaving our company didn't have very much to do with compensation and don't get me wrong, compensation is always important but they were leaving because they felt disillusioned, they felt disconnected from our organization, they didn't feel that they, as employees, felt value and that they felt that they were working hard, they were doing good things but nobody cared. And I thought that was really interesting because I knew that we could do better and we did, ron.
Speaker 1:Yeah, the caring aspect. You know we've gone through generations. I've been working in this industry for over 50 years and at the beginning nobody really thought to challenge or question the boss. You get hired. I came out of university in 1968 and was told and it was a pretty tough time to get a job and was told by everybody take your time because wherever you end up, that's it for the rest of your life. Now that's the 60s.
Speaker 1:My daughter goes to work in the 90s and at that time so basically let's say 70 to 90, from this is it for your life the feeling was in the 90s you're going to have five to nine jobs over the course of your career. Today, the 20s changes a century in there and the young folks changes a century in there. And the young folks my granddaughter, who's 22, says to me Poppy, our generation has what they call quiet quitting. I said what the heck is that? She said we only do as much as we need to do to keep the job because we need the money and then we go do with our lives. Whatever the heck it is, we were meant to do so in those three generations.
Speaker 1:Kurt, worthwhile work, bosses, that care, I believe it's always been true, needed and necessary, but I think you proved it in your blog that it is still something that gets people to contribute to the best of their ability, because they feel that they're recognized, they're listened to, they're cared about, that there's people that know about their lives, that they're having a baby, that their wife is sick or whatever is going on, which is just being people which is just being people.
Speaker 2:Yeah, ron, you know what. After you know, spending a little bit more time on this program and then also doing some survey from other organizations what they're doing well, what they're not doing well. Every organization, I truly believe, needs to have either an informal or a formal recognition program, but you have to have one or the other and you have to understand what is the drive for your employees. You know, everybody wants to do a good job, right? We've always talked about that.
Speaker 2:Nobody gets up in the morning and says, oh no, I'm going to come into work and not do a good job. They spend a lot of time and energy at their jobs and you want them to do something which is called contextual performance, which it's not my term, it was actually one of our HR directors' terms. But as an organization, if you really want to move further as an organization whether it be higher sales, better customer retention, a better culture you definitely want to have fully engaged employees. And getting fully engaged employees means that they're going to go ahead and volunteer to do additional work, which means that you need that impetus to go ahead and help them or want them, have them want to go ahead and do more additional work. So recognizing employees for doing a hard job or doing more is really, I think, a fundamental piece of a successful organization and a healthy culture.
Speaker 1:Yeah, I agree with you, the everybody wants to do a good job. That's part of you know, lou Holtz. Years ago, the coach at Notre Dame and other places became a speaker and he had a film that he put out called Do Right, and it was predicated on the fact that there's three things that every employee needs to be, or every boss needs to be aware of. Everybody wants to do a good job. Number one, number two and this one's intriguing and we spoke about it everybody can do more than what they think they can. And three, everybody's fundamentally lazy, but not in a bad way, in a way that they try and do things the most effective way that they can find. And it is absolutely remarkable. You and I have talked about it. I call the boss the conductor, and he's the only musician that has his back to the audience, to the customer, and his success, the boss's success, is totally dependent on the skills and talents and efforts and motivation and commitment and hard work of the musicians and we have that with every. You know you and I started in parts. Actually, you went to Mexico first, didn't you? And wet your teeth in a completely different place. We've gone through different journeys and I think we've been blessed by having those opportunities that most people don't have.
Speaker 1:They go to school, they learn. Some go to technical schools, come to the university. Some come straight out of high school, go to a job. A boss takes them in. If they do a nice onboarding job. They introduce them to other people, show them where the toilets are and lunches and all the rest of that stuff, and then they do a nice onboarding job. They introduce them to other people, show them where the toilets are and lunches and all the rest of that stuff, and then they sit with them and tell them and show them how to do the job. And that's an old teaching thing.
Speaker 1:I'm going to show you what I'm going to tell you, then I'm going to tell you what I just showed you. Then I'm going to show you again, and then I want you to try and we kind of leave them with the impression is this is the job, this is how I want you to do it Now. Get good at it, make fewer mistakes and do it faster and I'm happy. And that's such a flawed approach to life in my view. Maybe it's because I pushed back on my father. I'm not an obedient person, you know. I'm going to challenge everything in sight. Why do we do it that way? You know from a little person, our children, everybody. Why is the sky blue? You know, be curious, ask that you know.
Speaker 2:You mentioned a few things there too, and it was all very good, but one of those things that people and employees I found you know you can do a job, but if you don't feel like you're actually moving the needle, you feel eventually a little bit disillusioned. I'm not actually contributing to the better good, and I think part of it, too, is people sometimes are afraid to get out of their comfort zone. To your point, right, the challenge. I think getting outside your comfort zone is very important and I think, to your point, everybody can do more than what they think they can. Right, I've been lucky in my career. You made a comment about maybe my very first job is that after my undergrad degree from Wisconsin, who would have thought, after graduating with a marketing degree, that I was going to end up in T1 in Mexico in a maquiladora, as a master scheduler for a guy that never spoke any Spanish? But in order to go ahead and make a living because I was down to my last couple hundred hours of my student loan, I was going to find a way that I could be successful in that job and I found that by stressing myself in a healthy way, I found I was able to go ahead and do so much more than I ever thought.
Speaker 2:Fast forward a couple more years. I had an opportunity to become a consultant to John Deere and I was working for a small independent manufacturer after I left Tijuana and never thought I could go to work for a Fortune 500. As a matter of fact, my very first week with john deer I had a. I had a meeting with the parts distribution center team and I tell you every single one of those people and there's probably 12 people in that room and I was there to go ahead and talk about the necessity of putting my parts in parts distribution center they were talking acronyms. As a matter of fact, I thought they were speaking in tongues. I mean, I'm being facetious a little bit but every single other word that they were saying was an acronym and I had no idea. As a matter of fact, I was so disillusioned. After the meeting I called the hiring manager and said you made a big mistake. I shouldn't be a consultant at this company. I'll never understand these people because they speak in a language I'll never get. And you know what? What a great guy he was. He was such an important mentor to me. But he said Kurt, you can do more than you think you can. You are the right person for this job. We hired you to do exactly what you're doing and you know what. He was right. I was able to eventually talk, just like them Acronyms boy I probably use as many acronyms as any of the best of them right now. Right, but I was able to go ahead and push my sense of comfort right. I was a, you know, I had more capability than I thought I had and from there I was able to go ahead and feel confident.
Speaker 2:I think you know we talked about stress. Whether I was in Tijuana, whether I was working for a Fortune 500 company, whether I was working for a dealer, something outside my comfort zone, stress is healthy. I think the right stress is healthy. I think you know there's a friend of mine from John Deere Financial he's. He actually had a quote out there that you know, stress could be a superpower and, like anything in my career, when you push yourself, you can go ahead and do amazing things in your career. And, to your point, we're very lucky in our careers because we've had so many opportunities but, to give ourself a little bit of credit, we've kind of taken those opportunities, we got outside our comfort zone and we've been able to go ahead and flourish from those experiences.
Speaker 1:You know there's so many. As you know, I'm really passionate about helping people get better at whatever the hell it is that they do. And Seneca, the old Greek stoic, is famous for saying opportunities come to those that are prepared. And something that I've cottoned on to for a long time is and posing the question is what would you do if you weren't afraid? What would you do if you weren't afraid? And I don't. I subject myself and I understand the word stress, but I change that. I call it performance anxiety, and my granddaughter, who's a very talented, hardworking, curious person, doesn't like to speak in public because they're older people. She feels that they're more knowledgeable, and who is she to be telling them what to do or being a subject matter expert on anything which she is?
Speaker 1:I started teaching when I was 16. I started teaching at university when I was 18. And I've always been involved in how, how can you get better? And the thing that I learned. You and I have talked about this.
Speaker 1:I was a swimmer for a long time, competitive swimmer, a long time competitive swimmer, reasonably good. But in swimming you're not competing with other people, which is, I think, also part of our workforce structural problem. You're competing with yourself and I think I've even said this, with you standing on the blocks before a race if I finished last but beat my best time, I won, and that's something that's really interesting. Now here comes stress and performance anxiety.
Speaker 1:Before I left the home going to a meet and I never lost a race just for the record I would throw up. I'd get to the pool and I'm changing and I would throw up again. I was anxious like hell and a lot of people say that's stress. And I was 16 when I stopped competing competitively, had records for five or six years I think some of them still stand in Canada Just missed the Rome Olympics by two-tenths of a second. So I was pretty good in the pool but I couldn't handle the performance anxiety. So that gave me another vision into people, the people that are the top of the pile, the best of the best, the top guns, whatever terminology you want to have the Michael Phelps if I look at the pool, he has physical attributes that give him an advantage, but he has emotional attributes and discipline, attributes that are really rarities in people.
Speaker 1:It are really rarities in people. We grow up, we go to school, we're obedient, we follow the law, we apply for work, we get a job, we get good at the job, we work hard, we get married, we have children, we progress through our life and ultimately, we all end up in the same place. We can't control when we're born and, as they say in Japan, you can't control when you die. And the only thing you can't control is between those things, what some people call the dash on the headstone 1946 to 2025, dash in the middle. The dash is everything that we do, and that's kind of.
Speaker 1:You go to work, I want to do something worthwhile exactly what you were saying. I want to do something worthwhile exactly what you were saying. But how do I get a performance review? Who tells me whether I'm doing a good job? How do I know what doing a good job looks like? I think we do a terrible job in communication, kurt, as leaders. What do I want you to do? Simple question or have you been here six months? What do you see that you really want to question why? You know you got anything out there. You found that why do we do it that way? We don't do that stuff. It used to be called personnel. Then it morphed into human relations personnel. Then it morphed into human relations. Now it's called talent management. Interesting nomenclature changes A lady that writes for us out of Australia, very talented human relations person, sonia Law. She calls it a job architect and what she's implying is that the person who works with you is the one who's going to design the job that they're best at, not the job that the company needs.
Speaker 2:And that's an interesting view.
Speaker 1:So I got eight guys on the counter, telephone and walk-in business. What do I want them to do? And that's a nasty job, kurt, as you well know. That phone's ringing all the time, hair's straight back and yet anytime the boss is there, they're all sitting on their butt having a cup of coffee because they're taking a deep breath. Everybody the boss would come and say why you got so many. You don't need that many people.
Speaker 1:Now we're into the next phase of leadership, which is doing more with less. Making more money because I've become quote unquote. Making more money because I've become quote unquote more efficient. And efficiency is measured by sales per employee, and that number goes up when I cut the number of employees, which is exactly what I see in our workforce today. In the construction equipment world. We do not have enough people to provide the level of customer service that I think our customers deserve, and if we don't channel the employee properly, if we don't have some kind of formal or informal rewards, what's going to move them to do something more? To call a guy back and say thank you, I appreciate your business.
Speaker 2:It's a tough game. Yeah, that goes back to that contextual performance. You're absolutely right. The person that's willing to make that call to that customer and thank them for their business because and I've heard you speak before and I recognize that it's so important is that customer retention piece. You know, I spent a bunch of my career in sales and you know we're always looking at share of market and of course we'd break down the share of market.
Speaker 2:Look at all those customers we didn't sell to. Look at all those customers we didn't sell to. And then we always tried to devise tactics and action plans on how to go ahead and find those people that, for whatever reason, they chose not to buy from us. But what we failed oftentimes is to look at the people that are doing business and we would spend, we would reverse our energy, spend 80% of our energy going after the people that we aren't doing business with, but completely forget about the people that we're doing business with until they stopped doing business with us and they wouldn't be giving us a call on the phone or sending us a note saying, by the way, you completely forgot about me.
Speaker 2:You haven't shown any interest or thanked me for my business. You've always been looking for the next guy. They just go someplace else because there's always somebody hungrier. So I find that doing that next step, continuing to look on ways to keep that customer base showing great customer service, are all those fundamentals that oftentimes we overlook, particularly in a sales environment, whether it be product support or just equipment sales. We just always needed a better job and, you're right, we don't always have enough employees to do just that.
Speaker 1:It's actually quite shocking.
Speaker 1:In 1980, I was asked to get to put together a bunch of metrics and standards and one of them was sales per employee and the number that came out was $600,000 per parts person per year, excluding product support sales and excluding the manager.
Speaker 1:So if I had 10 people in parts that's warehouse office, counter inventory, purchasing, all of that stuff if I had 10 people I was expected to sell $6 million a year and from there you look at what your gross profit should be, your expense ratios and all the rest of this stuff. That's 1980. Expense ratios and all the rest of this stuff that's 1980. One of the standards was payroll expense should be expressed as a percentage of your sales and the number that's right is 7%. So if 600,000 is my salesman employee, my payroll package for a parks person everybody but the manager and no product support salesman is 42 grand. That's 1980. Today most dealers that I touch are between a million, two and a million, eight per person per year and being the idiot that I am, and you know me well enough to know that I do this.
Speaker 1:I say you know that standard 7%. So let's just make this easy and say you get a million dollars a person, are you paying the people in the parts department $70,000 a year? And the answer is hell, no, right. But I know dealers that are selling $2 million per person. That's 140 grand. So let's just say gently that 60 grand would be a reasonable pay package today for a parts person 72, 80, whatever the number is reasonable pay package today for a parts person 72, 80, whatever the number is. Where does the difference go? If I have sales per employee that generates more net income than is required by a standard metric, it goes to profitability Contribution margin, absolutely. So now we get into the situation where I'm fighting with the boss, who's really happy because he's making a lot of money, saying wait a second, you're doing this on the back of people and you're losing customers every year and they don't know that.
Speaker 2:And that's your retention point Yep. And then it's just too hard to backpedal. Once you start seeing in your financials and you start digging down, just like we did with the employee retention, it takes a lot of time and energy to turn that momentum back. Momentum back, and at that point in time, as we've always talked about the old analogy is how much it takes to go ahead and keep a customer versus getting a new customer right.
Speaker 1:It's just too difficult, too much for resources and that's kind of a shocking statement, isn't it? On the face of it, and I agree with that 100%. You know what the market share animal that we look at manufactures OEMs and you were with Deere for a long time live and die on machine sales. And if we look at the construction equipment world and look at the majors let's say Caterpillar, komatsu, deere, volvo, case, jcb, blah blah there's only two or three of them that'll get 20% on any aspect of the market on the equipment side. And then I ask dealers I want to see their retention rate. And every five years we did a survey with the A&E and the customers responded to us and one of the questions was who does your maintenance work? Is it the dealer? Is it your employee? Is it an independent? Is it a specialty? Blah blah. Is it the dealer? Is it your employee? Is it an independent? Is it a specialty, blah blah.
Speaker 1:And we found that really really good dealers, really good dealers, would get 35% of more of your total dealer sales in the service department. You're at about the 90% of dealers in the planet area, meaning that 90% of the sales that you got in your business come from something other than the labor aspect. And you and I talked about it. Every time my technician sells an hour of labor, he buys parts, absolutely, and he's the only one that's guaranteed to buy my parts. That's not always true, but for the most part. And then it really got my attention when I asked and these surveys who does your maintenance work? And these surveys who does your maintenance work? And 95% of the customers said they didn't go to the OEM dealer. In other words, 5% said they went to the OEM dealer and 50% of the labor hours that are applied to a machine over the course of the life of the machine go to maintenance.
Speaker 2:This is shocking stuff, kurt. What an untapped opportunity, huge.
Speaker 1:Huge. Now, if I'm doing all your maintenance, I should be the first one to know when there's going to be a problem, when there's going to be a failure. That should be a head start on all the repair business. Somehow we're in the equipment business and I think we should be in the labor business.
Speaker 2:You know what I learned too late, ron. You started me back 35 years ago in the product support side and then, of course, I drifted to other parts of the business sales finance but it wasn't until I came back, my last three years of my career and working for the dealer in the product support side, that I truly understand what you were teaching me 35 years ago is that we know how to go ahead and keep many of our customers is by offering absolutely a customer a focused customer service. For those people. Right Is to ensure that we're doing the best possible job. But that's really where the money's made, both in the parts and if you look at the margin on the labor. So why don't we spend more of our time there? And I think you had another podcast I was looking to because oftentimes, to your point, manufacturers are looking at the market share, looking at the equipment side, but if the dealer isn't looking at the product support side, it's just you can't make money on the, on the new equipment anymore.
Speaker 2:It's just like the automobile industry. I think it's gone the same way. Equipment anymore. It's just like the automobile industry. I think it's gone the same way. And before I you know, before I left my last organization we did we started looking at that untapped potential for maintenance and what we started doing is looking at a way to charge customers by the hour for their maintenance. And it's a much easier way of selling to a customer by just saying here's what your hour meter is, and how about if we take care of all your maintenance? And what we're going to do because we can through an hour meter and because we can all see hour meters now through data links is how about if we just send you an invoice every month and we're going to go ahead and do all your preventive maintenance? And you know what? I think they're on to something I really do believe that's the movement that we need to make within the industry.
Speaker 1:I call that subscription services, perfect. When we sell a machine and think to buying your car, you're in a building. It's a little different, obviously. The salesman will do everything. They'll wander around, they'll answer all your questions, they'll do the 60 font pen writing out the quote and you come to an agreement, you and your wife or your partner, that we're going to buy this vehicle. We love this vehicle, and here's a price. And boy, we've agreed on it. But then the salesman says well, I have to go check with my boss to get that approved. There's some water, coffee, tea, pop, tea, pop, whatever. Give me a couple of minutes off and he comes back. And not once will they come back at that price. The price goes up. So now you're in a different place. I want that vehicle. I agreed to a price. He changed the price on me, so instead of 30, it's now 33. Oh darn. And they've written books about this. I mean, this is a planned deal. However, now they get shuttled over to the real closer.
Speaker 1:Who's the finance person? Who's the finance person? Would you like some insurance? Would you like a maintenance program? Would you like an extended warranty program? Would you like a parts guarantee program? This is $15 a month. This is $25 a month. This is $75 a month, and we're real slow to the game here, kurt. Yes, sir, but now change the context from the customer and buying something to the employee. I've got the employee. I've hired the employee. I've trained the employee. They've been with me for a while. What's their next step? How do they make more money? How do they progress through the organization? What would they like to do? We don't engage in those discussions. For the most part, I had a boss for years. I worked in dealers for 13 years, I think, and I never once had a performance review. And I would ask my boss in Montreal, who was a very talented guy for a performance review, and I would ask my boss in Montreal, who was a very talented guy for a performance review. I don't believe in those things. Did you get more money?
Speaker 2:Yeah, Well, that's your performance review.
Speaker 1:Get out of here. And it's not about money, as you said. In the old days people didn't leave because they weren't paid properly. They left because the boss abused them. That's what used to be the case. Now they're leaving because nobody cares. It's still not about money, but that reward structure thing can be financial. It doesn't need to just be. You know, come by us and put my arm around your shoulder. You're a really good guy. I love what you do for me. Thank you very much. I can incentivize people with money. I can incentivize people with days off. I can incentivize people with gift certificates to a restaurant for you and your wife on your anniversary. Or I can give you a day off on your birthday, like the automotive businesses used to do. There's a lot of different ways that we could explore, how we could make the employee happier at what they do, but we don't ask those questions what would you like that would make your job better? Has anybody ever done that to you?
Speaker 2:Has anybody ever done that to you? I had a young parts person who just had a tough life, came from Texas, came to work for us in Colorado, had actually a son who died, was murdered, and talk about being put through a ringer, having to go back to the funeral, having to come back, become a better parts person, and you know what. This wasn't part of her training and you know what this wasn't part of her training. But every time I stood back and watched her personality, her character and the way she words program. I carried gift cards in my pockets. You know anywhere from 20 to 50 bucks. That wasn't a big deal.
Speaker 2:But I took her aside, ron, and I said listen, I just want to let you know that we recognize what a great job you do for our organization and, more importantly, what you do for our customers. I said you know it's $50. And, more importantly, what you do for our customers. I said you know it's $50. It's not a significant amount, but I wanted you to know how much we appreciate you. And you know what? Yes, did she cry? Absolutely. Did I want her to cry? No, but she was. No one had ever taken the time to recognize her contribution to our organization and, after having such a horrible year to be able to really feel that she was a contributor to this organization and, more importantly, a positive contributor to our customers, that's where I learned the importance, in many, many ways, of a recognition program. It matters to our employees. Never assume that it doesn't.
Speaker 1:The fact that it brings tears to the eyes of a person and I know that you as a person would do that even if there wasn't the 50 bucks. The fact that it brings tears to people's eyes is an acknowledgement of how lonely and how isolated people genuinely feel. They're alone. They got to figure their way through this by themselves and so, rhetorically, I often say to people have you been thanked too much? You know there's no such thing as and thank you. A lot of people say, well, that's old-fashioned, ron. I thank people. You know I'm sorry if that makes you feel bad.
Speaker 1:And then I always used to start off a class and I don't remember if you were in a class or we did things informally. But you know how many people can give me the definition of ignorance? And you've heard this routine and everybody they don't know me, they're walking in it's the first time they've had me in a class and there's 20 or 30 people that don't want to embarrass themselves, so they keep their mouth shut because they don't know what the hell to do, right? So I poke and I get questions and I get people talking and thinking and then I take them off the hook and say well, ignorance is not knowing what to do. Ah, okay. So then I say now we got a second one what's the definition of stupidity? Well, some people in the room have figured it out and they come up with the answer, but probably two-thirds to three-quarters still don't, because they don't know quite. They haven't been asked to think for themselves yet. Often their parents didn't ask them to think for themselves. They learned to be obedient. Their teacher didn't ask them to think for themselves. This is how you learn arithmetic. This is how you write cursive, which doesn't apply anymore. So the answer to the stupidity question is knowing what to do but not doing it. Well, that is stupid, and so we have a little bit of discussion of that, and we ended with the definition of insanity, which is attributed to Mark Twain or Einstein continue to do what you've always done, expecting different results, which is insane. But that's how I started every single class for 20 years, and it always shocked me the first time through that people wouldn't get to question ignorance. And I'm ignorant in so many ways. It's scary. I think we all are. But I go back to the tears.
Speaker 1:The last couple of years I was on a podcast with somebody and the statement was made relative to customer service and engaging with people that I changed an approach to my life. Whatever anybody asked me for, I say yes, period, it doesn't matter what it is. Yes, it's got to be legal, it's got to be relatively moral, and if they don't ask a question I'm going to provoke. How can I help you? And both those questions confuse the hell out of the audience. You ask me for something. I say yes, whoa, how can you do that? You don't even know how to do it. Yet I'll figure it out. Do that to your employees. You know this customer has been a customer of ours for 25 years. Is there anything that they don't buy from us that you think you could get them to buy from us? Stupid things, kurt. You know, barry, you've been dealing with that customer for a long time. You know they don't buy one filter from us. Do you know why? And then just here we go. You know it's changing the view. It's changing the perspective.
Speaker 1:Our other podcast is called the Clouds Are Upside Down, which is looking at the world from a different perspective. Employees are heroes. They're the glue that creates the relationship with the customer, and we're in the relationship business. We're not in the parts business or the equipment business. We're in the people business, we're in the relationship business. I love you, man. You know what did I do to get you mad? I haven't heard from you for the last 30 days. Everything, okay. We don't give the employees that kind of thought pattern. Do the job, you're a tool in a toolbox. I hate that, absolutely hate it. And that's why I was so struck by your blog on rewards, because it's the real deal, baby.
Speaker 2:Yeah, thank you, ron. And I think every organization still finds themselves with the legacy managers that, to your point, you're doing your job. Why would I want to thank you? Or that nobody's ever thanked me? Why would I want to go ahead and offer thanks to my employees, thanks to my employees? That's a legacy, thinking that is. And those are.
Speaker 2:That's where we need to identify those managers, because now that we have these recognition rewards programs and we have data, you know we can look at metrics, and metrics do tell us something, especially when we look at those managers that are actually providing recognition rewards to their employees.
Speaker 2:And then we can also look at the same metrics and say, well, why are other managers doing that and other managers not? And then, if you overlay attrition levels on those same managers that are not embracing a recognition reward managers, you're going to find a relationship there, higher attrition ratios, right. And then, when you start having those conversations as leaders of an organization with your managers that aren't doing it, the question becomes why? And then putting stretch goals out to those managers, as far as let's go ahead and try to develop something, because, again, those managers maybe, for whatever reason, we didn't give them the tools, training, authority, accountability, whatever it might have been, but it's an important part of their job. We don't need them to do other, their their employees jobs. We need them to manage, and part of that management is to ensure that their employees are doing everything, everything they can, to the fullest of their potential yeah, it's.
Speaker 1:It's as you know. That's what I'm. My my purpose in life is to help people identify their potential, personal and professional, and then to give them learning paths or opportunities to achieve it. And that's nasty, nasty, nasty work. And I've been there. It's not very happy. When I first got married and became a father, every year I would do a personal review of myself. And after a couple of three years, marlene, my wife, said to me Ron, why don't you go get a hotel room? Because we don't want to be around you. When you're doing this to yourself, you know, because, if you think about it, who's going to be the most harsh critic of you? If it isn't you, who is it? It's you, and I don't like being nasty to myself and saying, oh god, you failed on this, you could have done better on that, you know.
Speaker 2:But that's me you are, you know what. Uh, and well said, ron. But you know, as managers we do owe it to our employees. Uh, and I don't get me wrong, I did performance reviews. But what I found with performance reviews I hated the annual ones, because oftentimes I found that was the only time that my manager had any conversation with me on my performance was at the obligatory performance review period of time, right, and I didn't like it because generally, if you have a good relationship to your employees and you're going back to your earlier conversation, the communication piece, there should be no surprises at that annual performance.
Speaker 2:So what I did with my last position is every one of my employees had a one-hour calendar appointment. Position is, every one of my employees had a one hour calendar appointment, one on one conversation with Curt Pease, right, and during that period of time, yes, did we talk about what their goals were for that year? Yes, but it wasn't. It was maybe 10 minutes of that entire one hour conversation. It was about everything else and particularly any of those obstacles that that employee had as far as meeting their objections and also, you know, if they wanted, what were their aspirations. Now, of course, you couldn't talk every month for their aspirations.
Speaker 2:For people that said, hey, I want to become a manager. Well, great, what are the key? Here are the key components of being a manager. Here's where I think your strengths are, and here are the things that we need to do, in my opinion, to go ahead and solve for you to go to that next step. And let's talk about those every month, because if I'm being a good manager, I'm communicating both the strengths as far as the weaknesses, and those are hard conversations to have, but, at the end of the day, I want to make certain that I'm completely transparent with my employees so that there's no expectation later on in life saying, well, how come I can't do this, why can't I do that?
Speaker 1:Does that make sense? Oh, absolutely. You know one of the things that I'd like to have the employees that I work with give me a review. What do you like that I do, and you want me to continue?
Speaker 1:Good for you, what don't you like that I do? And you want me to stop Right on. And what do I do? That doesn't really matter to you. And I started doing that in I don't know my second or third year in a supervisory role. Good for you, and it was selfish on my part, because I can the things you like terrific. You know, I can keep doing that. The things that you don't like. Then I had to evaluate is it a style? Is it the communication style? Is it the communication style? Is it a personality or is it legitimate? And I have to be a little bit better at getting it done. But the one that was most beneficial, what are the things that don't really matter? Guess what I did? I unloaded those to other people, so it gave me more time to do the rest of my job. There's so many things.
Speaker 1:Another little exercise I used to do, and I still teach it this way five things, tell me five things, mr Employee. All of you, everybody in my team make a list and then we're going to get together and talk about it. Give me five things that you'd like to do that would make your job better. We go through that exercise. They write it down, then give me five things that you'd like to change on your job or think we could change on the job that would be better for the company. Okay, then give me five things that you do in your job that are real pain in the butt for you to do. And they hand them all in to me and we're in a team meeting. It's in the evening, it's a whiteboard or a flip chart or blackboard or whatever, and I start writing them down and I'll take the first one and I'll write, write it up and we'll talk about it and we'll make it the same for everybody. So everybody's in agreement with what that thing means.
Speaker 1:And we end up with five things that would make their lives better, five things that would make the job better and the company better, and five things that are a pain in the ass. And I would always ask the question after all this is up there, you guys are agreeing with all of this. Yeah, absolutely. So why are these things that are five better for the company not done already? And it was silent and I'd say, okay, who wants to take the first one? And I'd say, okay, who wants to take the first one? And I'd assign the five and then we go to the next list that are better for you as a person, who wants to take those? So now I've got 10. If there's 10 people in a group, I've got 10 people busy. The five things that are a pain in the ass. I'll look after that, or something little exercises to get people thinking differently about what they do. And we are with our employees in our workplace more than any other aspect of our life. We spend more time with co-workers than our families, and that's disgraceful.
Speaker 2:But what's important here is that those employees that you identify those obstacles of doing their job and finding maybe a reassurance that those would be taken care, whatever right that I could actually do a better job because you're going to take these obstacles away from me.
Speaker 1:Think about that for a second, because the first time I would do this with a new group of people. It scared the hell out of them. They didn't know what to do with me. They never had a boss that way. Well, the other part of it is, if they make mistakes, they get whacked up the side of the head. Mistakes is how we learn. If you're not making mistakes, you're not doing anything. And yet and you're talking about I love the term legacy managers we're going through this transition from being thing oriented to being people oriented. And just think of where we are now, kurt, with artificial intelligence, data analytics, machine learning, all the technological tools that we have available. It's remarkable.
Speaker 1:So my last little foray into this with you is I was dealing with a dealership, a John Deere dealership in the Northwest, and I gave every single one of the people on the counter 100 customers and I said here's the parts volume, here's the service volume. I'm going to give you a check every month at the rate of 10% of that which it increased. And parts and service people are probably more salary focused than anybody else and they don't want to jeopardize this stuff. So they're very conservative about money. So we did this and they don't want to jeopardize this stuff. So they're very conservative about money. So we did this and they made money, and it was a really interesting exercise.
Speaker 1:I think there were six or seven people. The guy that did the best was the youngest. He didn't know what he couldn't do. The guys that made the worst were the ones that had been there forever. They didn't know what to do, but they learned and they talked to each other and collaborated. The guys that made the worst were the ones that have been there forever. They didn't know what to do, sure, but they learned and they talked to each other and collaborated.
Speaker 1:The next year, instead of 10%, I said, okay, I'm going to make a 20% this year. And he whoa, this is great, cause they were making money and they knew how to do it. And so it's now month 25. I said, okay, I'll make you a deal. I'm going to reduce your pay by 20%, but I'm going to pay you 40% of the growth. I'm going to give you a choice. I'm going to let you have three months to pick and choose, but at the end of three months you have to pick one. They all took a pay cut.
Speaker 1:Performance-driven rewards work. Your blog is right on point, whether it's understanding the job, whether it's being trained on how to understanding the job, whether it's being trained on how to do the job. You know we have job assessments, kirk 96 questions that I like every employee that touches a customer or leads people to take once a year, and I want the boss to see it and I want the boss and I to talk about it and I want, collectively, for us to talk about how I can improve my score and that makes life so much easier. And to your point about the annual review, every time I see something I'm walking around all the time. Half of my day always was out of my office walking around. People get used to it, they love to see you.
Speaker 1:How are you, ron? And everybody said well, don't You're wasting their time, bullshit. I'm getting to know them as people and they're getting to know me as people, so that they're not afraid to make mistakes, they're not afraid to try new things. That's how we progress. Our filter market share is terrible. How we progress. Our filter market share is terrible. Well, we don't make the filter, it doesn't really matter. Ah, bull, well, my price is too high because Fleet Guard's just down the street and Fleet Guard supplies deer or Kamatsu or whatever, it doesn't matter.
Speaker 1:And who owns Fleet Guard? Well, cummins does. Yeah, gee, we have their engines, all of this stuff, and we don't even know it. We don't give the people that information. You change how they're rewarded all of a sudden. They thirst for that information. They can't wait to see it. Let me see. Let me see how do I do? How do I do? And here comes the check. Hey, george, here's $2,000. You increased the sales that month by $20,000. Congratulations, and that's a lot of money for the people on the counter. It is Got to be impactful. So thank you so much for that blog.
Speaker 2:It was right on the money Rod. I appreciate you. I've always appreciated you for our long relationship together. But, most importantly, thank you for letting me contribute to today's conversation.
Speaker 1:I would probably like to close it there, but you know I'm going to want to do another of these with you. It'll be a different thing, it'll be a complementary thing, but, kurt, thank you very much. Thank you for the blog and thank you for the blog and thank you for this time and to everybody listening. I really appreciate your thoughts and comments. So when you see the podcast published, if you want to make any comments, please do. In the meantime, mahalo and thank you.