Archive for March, 2009
There are two things that raise my skepticism meter: #1 Politicians. #2 The word Green.
I believe politicians’ motives should always be questioned. It’s a good idea to suspect the first 100 or so things they say, before they get to the real deal.
And Green has been splashed over everything to sell stuff, even a Bamboo Baby Hat (real) and a Grass Cell Phone (conceptual).
So why, in the midst of AIG bonuses and stuffing taxpayer money into banks, should the idea of the US government funding another bank with $10 billion sound worthwhile?
Here’s why: A Green Bank to Fund Clean Energy!
“Tuesday, March 24, 2009, Congressman Chris Van Hollen (D-MD), Assistant to the Speaker, introduced the Green Bank Act of 2009. The legislation creates the Green Bank as an independent, tax-exempt, wholly owned corporation of the United States. The Bank’s exclusive mission will be to provide a comprehensive range of financing support to qualified clean energy and energy efficiency projects within the territorial United States…
The Green Bank Act of 2009 would do the following:
- Create the Green Bank as an independent, tax-exempt, wholly owned corporation of the United States with the exclusive mission of providing a comprehensive range of financing support to qualified clean energy and energy efficiency projects within the territorial United States.
- Provide the Green Bank with an initial capitalization of $10 billion through the issuance of Green Bonds by the Department of Treasury, with a maximum authorized limit of $50 billion in Green Bonds outstanding at any one time.
- Assist in advancing vital national objectives — including transitioning to a clean energy economy, job creation through the construction and operation of clean energy and energy efficiency projects, abating climate change, energy independence from foreign sources, and fostering long-term domestic manufacturing capacity in clean energy and energy efficiency technologies.
- Include robust spending safeguards and public disclosure requirements to ensure that the Green Bank operates at the highest levels of efficacy, accountability and transparency.“
Now I don’t know how you feel about more taxpayer money being spent, but I can buy into this one.
Why? Because:
- It respects entrepreneurship by providing those who qualify with the capital to get things done
- It honors the competitive marketplace by not saying who’s to be successful and who’s not
- And it puts taxpayer money to work:
- Creating green jobs that will help the US economy
- Creating clean energy production & energy efficient products/projects
- Helping slow climate change
- Reducing dependence on foreign energy sources
What’s not to like?
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Chris Arlen
President, Service Performance
Technorati: Green Bank Act of 2009, clean energy, green jobs
March 27th, 2009
March 16, 2009 Unhappy Janitors at Microsoft protest subcontractor’s cuts
This article points to the janitorial subcontractor’s staffing cuts and unhappy janitors because of increased workloads.
It made me wonder about our last blog post A Janitorial Fable on Mar 12, 2009.
I wonder if specifications were changed at Microsoft to reflect higher workloads.
I wonder what, if any, communications went to janitors and Microsoft end-users to reshape their expectations.
I wonder how the situation would’ve played out if the subcontractor had read Continents of the Contract Service World?
What do you wonder about?
(Disclosure: SBM Site Services is not a client of Service Performance. ABM Janitorial Services is a former client. 17 years ago, as Sales & Marketing Director for ABM Janitorial, Chris Arlen (that’s me) wrote the proposal that secured the Microsoft contract for ABM.)
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Chris Arlen
President, Service Performance
Technorati: Microsoft, janitors, janitorial workload
March 19th, 2009
Long away and far ago the cleaning contract for Ubetcha Corporation was coming to the end of its term.
The contract was for millions of square feet and millions of dollars. It was much lusted after by janitorial contractors.
The Procurement Manager for Ubetcha pre-qualified five cleaning contractors, including the incumbent. A Request for Proposal (RFP) with cleaning specifications was sent to all.
All contractors returned proposals and pricing.
Ubetcha’s Facility Manager reviewed the proposals and saw several viable candidates among the bidders.
Procurement compared contractors’ pricing.
One contractor, NowUseeit2, was particularly aggressive with their pricing. Their numbers stood out, stood below, far, far below the others.
During the presentations Ubetcha challenged NowUseeit2 to explain how they could deliver at their pricing.
NowUseeit2 boasted of high-productivity, world-class training, and hiring practices second to none. And of course, their people were their greatest asset.
NowUseeit2 summarized by saying “Don’t worry, we’re professionals. We’ll take care of you and your end-users. And we’ll do it all within our pricing”. Ubetcha couldn’t argue because NowUseeit2 had been pre-qualified.
As you can guess, Ubetcha inked the deal quickly and announced their new cleaning provider to the other bidders.
The winning price somehow leaked to the street, as it always does. And the five losing contractors scratched their heads. The winning price was lower than market pricing, lower than logical, lower than wildly impractical.
They all wondered how NowUseeit2 could possibly deliver to specifications at that unearthly low price.
All That Glitters: Ubetcha
Ubetcha’s Procurement and Facility Managers were ecstatic. They’d saved a Christmas sized bundle.
The Procurement Manager saw a steroid pumped bonus ahead at year’s end.
The Facility Manager was just as excited. He’d hold the contractor’s feet, throat and internal organs to the fire for the promotion opportunities he was sure to receive.
Service Below Market Pricing: NowUseeit2
NowUseeit2 began service, working through the start up period.
The Facility Manager cut NowUseeit2 slack as they learned the ropes. And even when an uncommon error showed up, the Facility Manager was patient.
Into the second quarter the Facility Manager noticed a few out of the way stairwells weren’t particularly clean. Surely the specifications covered that. But there didn’t seem to be complaints from any of his end-users.
Why worry? On the whole NowUseeit2 was responsive to him and his end-users.
NowUseeit2’s account manager was friendly and sunny. She was a sweetheart. She was in front of Ubetcha’s key contacts each week. That was some hand holding.
It was true thought the Facility Manager, NowUseeit2 kept everyone happy.
Why should he complain about a spec not being kept here or there. Besides, there was all that money saved.
So the Facility Manager’s expectations were reshaped. Happy end-users, a responsive contractor, and huge cost reductions. Specs were, after all, only a guideline.
At the end of that year, NowUseeit2 won Ubetcha’s Service Partner of the Year Award. More for cost savings than quality, but they won it just the same.
One Moral of the Story
Some contractors bid below market pricing – to win contracts. This strategy wins some contracts some of the time.
Some customers feel that’s OK. If their end-users are happy and costs are compressed into a shrinking budget, what’s not to like? Expectations can be brought into line with budget. And specs are, after all, only a guideline.
Is this your reality?
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Chris Arlen
President, Service Performance
Technorati: janitorial service, janitorial contracting, outsourcing, purchasing contract service
March 12th, 2009
The airline industry is a great model for looking at big pain compressed into a short history.
It provides insights into cost cutting strategies, and how they play out over time.
Using our model from the Continents of the Contract Service World it’s easy to see how United’s new strategy can win in the struggling airline industry.
Before we look at what United is doing, let’s revisit our model’s four interconnected relationships:
EXPECTATION
EXPECTATION’s most important relationship is with the CUSTOMER EXPERIENCE as it shapes customers’ perception of delivered service – they’ll see in large part what they expect to see.
PROMISE
PROMISE’s most important relationship is with EXPECTATION as it tells customers what to expect – customers may not believe it all, it provides context and tells customers what to look for.
ENGAGEMENT
ENGAGEMENT’s most important relationship is with the CUSTOMER EXPERIENCE as it shapes service’s moment of truth.
CUSTOMER EXPERIENCE
Where customers experience and assess service.
Airline Industry Past to Present
When the airline industry’s operating costs got out of whack years ago, airlines:
–> went into major cost cutting mode
–> eliminated free in-flight meals
–> passengers’ CUSTOMER EXPERIENCE changed, no free food
–> passengers started bringing their own food on board
–> airlines didn’t have money to increase cleaning budgets
–> planes got dirtier, which changed passengers’ CUSTOMER EXPERIENCE
–> eventually flying in dirty planes became the norm
–> passengers’ EXPECTATION changed to “flying must be tolerated – not enjoyed”
United sees Opportunity
Once flying in dirty planes became the norm, United saw the opportunity to differentiate itself from the competition.
Its new strategy? Cleanliness. United is providing a more enjoyable CUSTOMER EXPERIENCE, saying “fly with us on a clean plane, who wants to fly in a dirty one?”
They’ve invested in deep cleaning every two weeks, steam cleaning and floor to ceiling wipe downs. And they’ve created a new position, General Manager of Cabin Appearance, to oversee the implementation of their clean plane strategy.
So far United is relying on Word of Mouth (WOM) to spread their new PROMISE, which is to fly on a clean plane, it’s enjoyable.
Don’t be surprised if they start marketing that new PROMISE in ads and media.
What does United’s strategy mean for facility services?
United saw EXPECTATION was lowered, and they could gain new business by raising their CUSTOMER EXPERIENCE relative to the alternatives (competition).
Facility services, in-house and out-sourced, are seeing their customers in severe cost cutting mode. This means facility services are skinnying way down too.
Whether its cleanliness, confidence in security, or reliability of mail – there comes a service level that’s so low the CUSTOMER EXPERIENCE is only tolerated, and not enjoyed.
What happens then?
Flight to Quality
It’s called the flight to quality. And it’s not just for airlines.
It happens to customers who have a choice to buy service somewhere else.
It also happens to end-users who have a poor CUSTOMER EXPERIENCE in the facility where they have to work. End-users will seek to work in other areas, sites, at home, or even leave for other companies if that’s available. And those that stay are less productive.
It’s like working on a plane with gum on the floor, someone else’s leftover sandwich in the seat pocket, and sticky all over the fold-down tray. Yes, you can work, but its not enjoyable, and you’re not as productive. Honestly, admit it.
How are you differentiating your CUSTOMER EXPERIENCE?
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Chris Arlen
President, Service Performance
Technorati: Customer Experience, facility service, United Airlines
March 5th, 2009
