On October 20, 2000, Brian Babcock spoke to the Young Entrepreneurs Organization. Instead of the traditional "speak and they shall listen" approach, Brian offered to answer questions from the floor, accepting a wide range of questions and topics. Below are summary notes from this session.

Q:

What effect has personal coaching had on your management style?

This question is what I call a "wow" question. It is a "wow" because of its importance, but more predominantly, because of its enormity. As readily as I say this, and I fear oversimplification, it became clear to me that I had to deal with my own "head, heart and feet". My intellectual resolution to problems was stronger than my emotional comprehension of compulsive repetition. I always, or at least virtually always, have meant what I said, and done what I've said (the head and feet part). I was not, however, aware of some "blind spots" in my personal life that affected all of my decisions.

I learned through personal coaching that we all have four to five major "themes" which are central to our life. This is definitely true for me. To understand these, or at least to know these, enhances my freedom to make life happen as opposed to the less favourably disposed situation of having life simply "happen" on its own. So, in a sense, personal coaching started me on a journey of self discovery that collided with my life in an immense and very positive way.
Q:

How do we keep employees?

This question is an excellent one and should be considered in a philosophical, tactical and strategic manner.

First and foremost, in the words of Jim Taylor and Watts Wacker, "KNOW WHO YOU ARE". Then, know who you want to be. Recognize your seminal moments. Finally, understand the barriers to your goals. For me, these simple maxims were paradoxically not that simple. They required significant effort of integrating "head, heart and feet". But they were important to the people in our organization and critical to our success, and hence, very significant to me.

Secondly, I believe it is imperative to understand that customers make markets for our businesses. Although some of you may challenge this notion, it is a very realistic one. This is a broad ranging subject that I would be glad to discuss further, but for now, let's assume this is a "truth".

In our organization, we defined our business as "safe, secure and on time". This easy-to-remember dictum with repeated verbalizations, became a dogma for operations. It is, I would suggest, a very different vision of customer needs than simply owning buses and employing drivers. It is tantamount to having what the customer wants, as opposed to persuading the customer to want what we have. There is a very fundamental difference in these approaches to marketing. So different, in fact, that I would call the second approach simply sales. This marketing distinction pervaded all corporate planning.

A large part of having what the customer wanted, was to operatively reinforce the behaviour of drivers and mechanics. For example, we provided substantial bonuses to drivers with accident free performance. Similarly, we rewarded low absentee rates, and bonuses were offered on a structured basis to long tenured employees. Our goal with these last reinforcements, was to ensure that each employee was familiar with their clients (their students), and even with some of the life patterns relevant to the students' transportation requirements. We needed to offer kids worry-free travel and security, that is, to feel safe from criminally intended harm (abduction, molestation and the like). These incentives, offered to our people, were always designed with the idea of looking for the "win-win-win". We wanted to ensure that:

it was respectful to the needs of our people
it served students in a superior fashion
it was "having what the customer wanted"
the customer was truly "delighted" (more than satisfied)
we could measure, monitor and evaluate customer satisfaction

By now, you probably realize that we inverted our priority thoughts in the profit service chain. Customers were our first priority, but that was inextricably linked to the actual service providers - our real heroes - the drivers and mechanics. The last priority was profit, really seen as a derivative, not as an objective of the process. To bring home this point, budget meetings were redefined as "effectiveness measurement meetings" which is very distinct from cost control.

You may also recall that I mentioned that some of the outcomes were predictable, such as the higher wage rate costs as a percentage of revenue. Insurance costs were, of course, extremely low (discounted below the table of rates), which was unheard of in the bus industry. Some outcomes were less predictable, such as ETIT's twice industry averages at 22% vs 11%. This less clearly predictable outcome was influenced by reduced fuel, maintenance and management costs. It was interesting that even depreciation was affected because our vehicles lasted longer, reminding me of Robert Anthony's writing, "all costs are variable in the long run". The plan worked as a "win-win-win" and both our customers and our people had value.

Thirdly, once we knew that kids were "safe, secure and on time", we set about developing a second level of strategic planning. Bob Simons, an accounting and control specialist from the Harvard Business School, had used recursive problem solving models to set strategic objectives. I liked the approach because of its compulsion to involve many people and because it forced a discipline of action.

The thesis was to ask your people this question: "If, in five years, we are doing a post mortem on our company, what went wrong?". Once people moved past the superficial answers such as, "we defaulted on the bank loan" and looked a little deeper, they defined critical success factors. We could guide people through different possibilities, even probabilities. They felt that critical success was defined as:

  1. Continuous Quality Improvement to Customer Needs
  2. People Deliver on Quality Improvement, so People are Important
  3. The Price of Produce (Service) is Important to Value Creation

With these in hand, a committee of driver, mechanic, office and management representatives defined the functions that would support the critical success factors. I asked for a limited list (four to seven), because these could easily be remembered in day-to-day operations. The Committee (representative in numbers of persons consistent with the size of their group), identified functional supports to critical successes:

  • inter and intra group communications (particularly listening)
  • learning opportunities related to job specifics
  • visioning and leading
  • planning models, etc.

We then asked each group to discuss with their larger constituent body, five or seven job specific factors that supported the functions. Finally, we asked the representatives to speak to their constituents and decide the method of measurement best suited for job factors. In other words, to propose the "who, what, when, where, why, how, and how much" of measurement. It was gratifying that some measures were quite challenging and substantive. As an example, a bus driver proposed that we ask kids and parents to score the happiness of their experience on the bus. The driver knew, as we all did, the breadth of this question. This was not a popularity question, but an issue of students feeling safe, free from "bullying", respected for their individuality and much more. It was evident at this juncture, that we were moving ahead in quantum leaps regarding "SAFE, SECURE, ON-TIME".

The recursive problem solving model was entrenched with an elected Committee Chair and a loose set of By-Laws. Management were part of the strategy team for four hours once every three months and they did not direct the meetings.
Q:

What does management do?

Firstly, one must ask if management will resist this model. The answer is clearly, "They will". In my experience, management will feel the most threatened. You will have to reassure your managers that you will not change policy direction but paradoxically, you will not abandon or disrespect any person. To call your front-line customer representatives "heroes" relates more to the importance of front-line delivery in the inverted profit-service chain, than to your own insurgency. Your insurgency is that of redefining your strategic operating model. Your managers will need to have confidence in you and your directed, focussed actions. You cannot overstate your own role as a revolutionary leader. At the same time, if you are not sensitively working with your managers, you will risk all. It is suggested that you read "Kotter or Hamel" on these subjects.

Secondly, we learned that we could play a much larger role in governmental and industry affairs. These roles enhanced our business opportunities. Our people not only encouraged us, but were very proud of their "bosses". This admiration certainly made our leadership roles much easier.

Thirdly, if things were going well, we learned that it was very pleasant to be free of guilt related to work stress. We spent more time with our families, played golf, skied, volunteered to work with charities and balanced our lives with intrinsically valuable activities (remember Barrie's seven L's of Legacy).
Q:

How do I attract good managers if my business is less glamourous than some?

The answer is embedded in all of the above thoughts. Less obviously, our organization hired students for summer employment, but with a very strong emphasis on "Manager-Student" mentoring partnerships. We ensured that mentors could relate to teenage persons and we saw this as a kind of "social rent". There was no expectation for corporate payback. The outcome, in spite of expectations, was the development of long lasting friendships. In fact, one student became the Chief Operating Officer of our organization and quite a company "star". Today, he is recognized as an industry leader. He played a pivotal role with the strategy of recursive problem solving, as well as with many other strategies, too numerous to recount here.

Workshop Leader: Brian Babcock

Business Background:

President and owner of Babcock Coach Lines: A School Transportation Company (1975 - 1999). Babcock's, located in Ontario, was nominated by The National Quality Institute for Canada's Award of Excellence (1995). The company was also recognized for "Best Practices for System Management in Human Resources" by Human Resources Canada (1997). Babcock's enjoyed strong customer loyalty, long tenure of employees and low absentee rates, while company margins were arguably the highest in North America.

Customer Retention: 100%

Employee Turnover: 12 Years

Margins: 2 times North American Averages