HBR: How One Fast-Food Chain Keeps Its Turnover Rates Absurdly Low

In this blog post Bill Taylor explains why Pal’s Sudden Service has a low turnover. They hire for attitude and train for skill. New employees get 120 hours of training before they work on their own. This one is my favorite: employees are given pop quizzes on the specific job they perform. Does your company spend time training, teaching, and coaching? What are your thoughts on pop quizzes from your employer? Is your personal growth keeping up with your company’s pace of growth? Below is a blog from the Harvard Business Review by Bill Taylor.

How One Fast-Food Chain Keeps Its Turnover Rates Absurdly Low

Many of us who are hungry for the latest dispatches from the war for talent look to to Silicon Valley. We want to know Google’s secret to hiring the best people or Mark Zuckerberg’s one tip for hiring employees. But in a world where most companies don’t operate on the frontiers of digital transformation, and most employees aren’t tech geeks or app developers, our appetite for unconventional talent strategies should probably extend to more conventional parts of the economy. Like, say, an amazing fast-food chain called Pal’s Sudden Service.

At first blush, there’s nothing all that amazing about Pal’s. It has 26 locations in northeast Tennessee and southwest Virginia, all within an 80-mile radius of its home base in Kingsport, Tennessee. It sells burgers, hot dogs, chicken sandwiches, fries, shakes—standard fast-food fare, although the taste and quality have a well-deserved reputation for excellence.

Dig deeper, though, and you see that nothing about Pal’s is standard for its business, or any business. The most obvious difference is its fanatical devotion to speed and accuracy. Pal’s does not offer sit-down service inside its restaurants. Instead, customers pull up to a window, place their orders face-to-face with an employee, pull around to the other side of the facility, take their bag and drive off. All this happens at a lightning pace—an average of 18 seconds at the drive-up window, an average of 12 seconds at the handout window to receive the order. That’s four times faster than the second-fastest quick-serve restaurant in the country

But Pal’s is not just absurdly fast. It is also staggeringly accurate. You can imagine the opportunities for error as cars filled with bickering families or frazzled salespeople zip through in under 20 seconds. Yet Pal’s makes a mistake only once in every 3,600 orders. That’s ten times better the average fast-food joint, a level of excellence that creates unprecedented levels of customer loyalty, as well as loud acclaim from management experts. Indeed, back in 2001, Pal’s became the first restaurant company of any kind to win the prestigious Malcolm Baldrige Quality Award—an award that’s gone, over the years, to the likes of Cadillac, FedEx, and Ritz-Carlton.

Ultimately, what’s truly intriguing about Pal’s, what allows this small company to cast such a large shadow, is the level of intelligence and intensity with which it approaches the human side of its business—how it hires, trains, and links its identity in the marketplace to its approach in the workplace. “If you watch professional athletes, everything they do looks so smooth and fluid,” says CEO Thomas Crosby. “But eventually you realize how much work went into that performance, all the training, all the skill-building, all the hours. It’s the same for us.”

So what can the rest of us learn from Pal’s? First, the best companies hire for attitude and train for skill. Pal’s 26 locations employ roughly 1,020 workers, 90 percent of whom are part-time, 40 percent of whom are between the ages of 16 and 18. It has developed and fine-tuned a screening system to evaluate candidates from this notoriously hard-to-manage demographic—a 60-point psychometric survey, based on the attitudes and attributes of Pal’s star performers, that does an uncanny job of predicting who is most likely to succeed. Among the agree/disagree statements: “For the most part, I am happy with myself.” “I think it is best to trust people you have just met.” “Raising your voice may be one way to get someone to accept your point of view.” Pal’s understands that character counts for as much as credentials, that who you are is as important as what you know.

Second, even great people need constant opportunities for improvement. Once Pal’s selects its candidates, it immerses them in massive amounts of training and retraining, certification and recertification. New employees get 120 hours of training before they are allowed to work on their own, and must be certified in each of the specific jobs they do. Then, every day on every shift in every restaurant, a computer randomly generates the names of two to four employees to be recertified in one of their jobs—pop quizzes, if you will. They take a quick test, see whether they pass, and if they fail, get retrained for that job before they can do it again. (The average employee gets 2 or 3 pop quizzes per month.)

“People go out of calibration just like machines go out of calibration,” CEO Crosby explains. “So we are always training, always teaching, always coaching. If you want people to succeed, you have to be willing to teach them.”

Which speaks to a third lesson: Leaders who are serious about hiring also have to be serious about teaching. Pal’s has assembled a Master Reading List for all the leaders in the company, 21 books that range from timeless classics by Machiavelli (The Prince) and Max DePree (Leadership Is an Art), to highly technical tomes on quality and lean management. Every other Monday, Crosby invites five managers from different locations to discuss one of the books on the Master List.

Meanwhile, every day, he identifies at least one subject he will teach to one person in the company. Actually, that’s a requirement for all leaders at Pal’s, who are expected to spend 10 percent of their time on teaching, and to identify a target subject and a target student every day. “All leaders are teachers, whether they realize it or not,” Crosby says. “So we have formalized a teaching culture. We teach and coach every day.”

The end result of Pal’s commitment to hiring smart and teaching continuously is that employees show the same sense of loyalty as its customers. Turnover is absurdly low. In 33 years of operation, only seven general managers (the people who run individual locations) have left the company voluntarily. Seven! Annual turnover among assistant managers is 1.4 percent, vanishingly low for a field where people jump from company to company and often exit the industry altogether. Even among front-line employees, turnover is just one-third the industry average.

“People ask me, ‘What if you spend all this time and money on training and someone leaves?’” Crosby says. “I ask them, ‘What if we don’t spend the time and money, and they stay?’”

That may be the most important lesson of all.

Turning Soft Skills into Core Skills: 3 Ways to Get Started

Blanchard LeaderChat

People Management Flow Chart In the field of learning and development, we typically refer to technical skills as hard skills and behavioral skills as soft skills. While soft skills are less tangible than hard skills, they are actually more valuable for a potential leader to acquire. Without the skills of communication, engagement, and empowerment, leaders are not able to direct and support people in the accomplishment of goals.

For this reason, I prefer to label these as core skills instead of soft skills. I’ve been using the term for 25 years, since I first heard a speaker extol their virtues. After the session, I suggested to the presenter that if these skills are so central to communication and maximizing effectiveness and contribution, they might be better regarded as core skills. To make a long story short, both the speaker and I used that term from that day on.

People are invariably the most expensive…

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Teach Someone a Lesson — Agile Selling

Teaching is a very important skill needed to advance your career. Do you offer a teaching lesson every week? Below is an excerpt from Agile Selling: Get Up to Speed Quickly in Today’s Ever-Changing Sales World by Jill Konrath.

Teach Someone a Lesson

Agile Selling: Get Up to Speed Quickly in Today's Ever-Changing Sales World
Agile Selling: Get Up to Speed Quickly in Today’s Ever-Changing Sales World

Maybe it’s time you teach someone a lesson. Hey-I’m not talking about being vindictive or seeking revenge! There may be some people who elicit that feeling in you, but we’re not going to go there. Instead, we’re going to focus on a super simple but highly effective strategy with big payback for you: teaching others in order to solidify your own knowledge.

The first time I ever trained someone else was early in my first year of sales. My boss, Diane, instructed me to go on a sales can with Alice, a trainee who had uncovered a really good sales opportunity while prospecting. As a newbie, it was highly unlikely that she’d close the deal without assistance. Diane asked me to show Alice what to do and to make sure we got the business.

Aargh! I was not ready for that. I was still fairly new myself, plus I didn’t know much about the other vendors. But clearly coming in second was not an option. For the next two days, I immersed myself in learning everything I could about the other two competitors. I studied how they stacked up against us. I talked to experienced reps to find out about pricing. Finally, planned out how I’d engage the prospect in a conversation that made us the obvious choice.

Before we went to the meeting, I reviewed everything with Alice. I outlined competitive strengths and weaknesses. I overviewed our plan for the meeting. I answered her questions to the best of my knowledge. With that prep, Alice and I went to the prospect’s office. Two hours later, we walked out with a signed contract. I was never so relieved in my whole life.

Here’s what closed that deal: I took a crash course in two competitors and became an overnight expert. In order to teach Alice, I had to really think through my meeting strategy step-by-step. Then I had to figure out how to explain to her what I was going to do in the meeting and why. Because I wanted to look good in front of Alice, my boss, and the prospect, I actually leapfrogged in my own sales development.

It seems strange to recommend teaching others while you’re still learning yourself. After all, we so quickly defer to the experts. However, the upside can be huge. As the Roman philosopher Seneca wrote nearly two thousand years ago, “By teaching, we learn.”

Annie Murphy Paul, author of Brilliant: The New Science of Smart writes about a program at the University of Pennsylvania in which students are responsible for teaching a specific subject to a computerized character. She writes, ”As they prepare to teach, they organize their knowledge, improving their own understanding and recall.” Doing this helps them find gaps in their own learning too, and they’re more motivated to master the material.

That’s exactly what happened to me. Teaching really challenged me to learn quickly. I felt really good about it. Alice learned. I got better. Consequently, we got the order that day.

After Alice, I had a string of trainees at Xerox. Each one increased my skill level. I became a conscious competent about what I was doing. In other words, I knew what worked, but it wasn’t second nature to me yet. Doing it right required me to pay close attention to all the steps involved. By teaching, I accelerated my learning significantly.

To this day, I teach so I can learn. You might want to give it a try. Think about what you really want to (or need to) learn about in more depth right now. What is it? Who could you teach it to? It doesn’t have to be people in your own company. Get creative. But most of all start teaching so you learn faster.

 

Want Success In Your Sales Org? Look to the Middle

Below is a blog post from the Harvard Business Review by Andris A. Zoltners, PK Sinha, and Sally E. Lorimer. Is your Sales Manager weak?  This will help strengthen your sales manager and team.

Want Success In Your Sales Org? Look to the Middlesuccessful sales management

To build a great company, it’s important to have strong executives leading the sales organization. But just as in the military, talented top officers can’t make up for weakness in the ranks of frontline leaders, the mid-level managers who are vital in driving day-to-day sales performance. “In any sales force, you can get along without the vice president of sales, the regional sales directors, and the training manager,” a sales leader once told us. “But you cannot get along without first-line sales managers.”

First-line sales managers (FLM) are the most critical players in a sales organization because they serve three important management roles — and successful ones excel at all three.

People manager: They select, build, manage, lead, and reward a team of salespeople.
Customer manager: They participate appropriately in the sales process to drive success with key customers.
Business manager: They act as a conduit for information flowing between headquarters and the field to keep sales force activity aligned with company goals.

Here are some common mistakes that FLMs make in each of these roles, and what sales leaders can do to avoid these mistakes.

As people managers, weak FLMs:

•Hire the wrong salespeople.
•”Feed the chickens but starve the eagles” by spending too much time with low performers.
•Manage by results only and demand improvement without coaching on how to get there.
•Take credit for the team’s success rather than giving others the recognition they deserve.

As customer managers, weak FLMs:

•Fail to put customer needs first.
•Take over customer relationships themselves and undermine salespeople’s motivation and confidence in the process.

As business managers, weak FLMs:

•Spend too much time on low value activities just because they are urgent or within their comfort zone.
•Put off important tasks that keep headquarters and the field aligned.

Sales leaders can strengthen the FLM team and its activities by improving the management support, tools, and training they provide. For example, leaders can enable FLMs in a people manager role by providing coaching tools and training, setting performance standards for how much time to spend coaching high and low performers, and creating a salesperson hiring process with screening tools (e.g. case studies and behavioral interview questions) and training on how to use them. Leaders can also enable FLMs in a business manager role by providing tools and support to make administrative tasks easier.

But most of the mistakes that FLMs make aren’t corrected through better management support, tools, and training. Rather, the mistakes are the result of selecting the wrong person for the FLM job – usually someone who was a great salesperson but who doesn’t have the characteristics to succeed as a manager. Most successful salespeople, even after they are promoted to manager, are driven by a strong motivation for personal achievement. Unfortunately, this can impede their willingness to:

•Let others take the lead with customers, especially when it comes to closing sales
•Show discipline and patience when it comes to dealing with headquarters
•Take a backseat while giving team members credit for success

As a salesperson, you win through your activities; as a sales manager you with through the activities of your people.

Excellent managers are a must if you want to consistently recruit the best sales talent. Remember the aphorism: “First-class hires first-class; second-class hires third-class.” It’s hard to recover from bad hiring, which is why it’s so important to make hiring (or promoting) the right front line managers who’ll oversee so many hiring decisions such a priority.

The post Want Success In Your Sales Org? Look to the Middle appeared first on Harvard Business Review.

Putting a Value on Training

Here’s an article from McKinsey Quarterly’s July 2010 issue, “Putting a Value on Training” (Click on the title to download the article). Jenny Cermak and Monica McGurk, talk about generating value for your organization and increasing performance. Below are two excerpts from the article:

“A retailer pursuing better customer service and sales growth, for example, could train employees by getting its managers to provide real-time coaching and to role-model best-practice customer-engagement techniques. Rather than just measuring the managers time allocation or employee-engagement data—as most would do now—the retailer should measure the impact of its programs through hard business metrics, such as sales, basket sizes, and conversion rates in critical categories or departments.”

“By tying the curricula of training more closely to key performance metrics and then measuring its impact on them, organizations can generate greater value from training programs and find useful insights to improve programs constantly.”