The E-newsletter For Waste Industry Professionals
(No.1, December 2003)
A Guide to this Month’s Edition
2. ProTips for Professional Development
3. ProTips for Operational Profitability
4. Topic of the Month: Route Audits
5. Quote of the Month
Welcome to the first issue of “ProTips, The E-newsletter for Waste Industry Professionals”. You received this newsletter because I thought you might be interested in information to help you with your professional development and to manage your business more profitably. The industry benefits when we all do our best, and my purpose is to stimulate your thinking.
I’ll include quotes to inspire or motivate you; I might even make you laugh. I’ll also discuss a different topic each month to maybe stir a little controversy or at least to raise your consciousness.
Each issue will end with what I call my ramblings. I’ll write about interesting people, places or things I’ve experienced, and some of my pet peeves. This month's ramblings include customer service, a pet peeve for everyone if it’s not up to par.
The best part about this electronic newsletter? It's free! It's my gift to help you become a topnotch waste industry professional. Enjoy!
2. ProTips for Professional Development
Read—Read about your industry. Find out what others are doing well and duplicate it. Are you reading the free industrial journals? Do you subscribe to their free electronic newsletters? So often I ask these questions of new managers and supervisors and I get a blank stare. If you’re not receiving your free personal copy of these magazines or newsletters, select either or both of these links: Waste Age Magazine or MSW Management, and subscribe online.
Consider the above links your starting point. Search the Web for more information about the industry or for answers to a burning issue you’re dealing with. The more informed you are, the more valuable you become. Be your own job security. People in the know run the world; be one of them.
Listen—Listen to what others are saying. I’m not talking about hot gossip. Listen to what’s being said about your company and the service you provide. Listen at your local chamber of commerce or neighborhood groups. What’s being said out in the field? How about customer service? Have you listened to your CSRs lately? Are they courteous and informative? These are just some of the opportunities you have to identify issues before they become problems. A wise friend of mine, Louie DeMattie, told me a long time ago, “Everything warns you before it goes out.” Head ‘em off at the pass. Be known as a problem solver. You’ll push your business and your career forward in giant steps.
Speak—Speak like a professional. Oh, yeah, I know, you would rather die than speak in front of an audience. Get over it and learn to speak well. I’ve listened with great empathy to supervisors and managers, and yes, some senior executives, mumble their way through a presentation. It doesn’t matter how important your subject; if you’re not a good public speaker, your message will fall on deaf ears. You may have the most brilliant idea ever conceived, but if you can’t communicate it well, it will never become a reality. Take a class at your local community college or join Toastmasters; learn to speak, and learn it well. You owe it to yourself.
3. ProTips for Operational Profitability
Operations—Operations is the lifeblood of our industry. This is where the action is! Sometimes, though, there are so many things happening simultaneously that even the most seasoned managers can be overwhelmed. Customers are screaming, drivers are complaining, and mechanics are shaking their heads in disgust. What’s a manager to do?
In my experience, there are two things you can do to ensure a smooth flight every day. First, pay attention to dispatching (takeoff). This is the first place problems occur. Make sure everyone knows all their assignments before they leave the yard. It’s not in your best interest to track down a driver in midday. Trust me on this one. Second, pay attention to the drivers’ check-in (landing). This is the last place problems occur. Did they complete all their assignments? I mean all of them? If they didn’t, you’ve just set yourself up for a bad day tomorrow, because when the drivers punch out and leave for the day, you’re on your own. You don’t want to be shagging all over town to complete their work.
Let me say it again--to have a good day every day, pay attention to your takeoff and landing. Make sure today’s work is completed today so you don’t have to deal with it tomorrow. Have a good flight!
Safety--Safety should be one of the three top goals for solid waste managers. Why? Because a poorly executed safety program is like a restricted artery. You’ll keep functioning, but your performance will be reduced. Accidents result in incidents to investigate, claims to handle, and forms to fill out, and the people involved are either injured or angry. None of these things add to the bottom line. A first-rate safety program, on the other hand, improves performance, builds morale, and reduces costs. “Remember,” says safety expert Edward Maghakian, Director of Technical Services for the Rule Company, “Safety is an attitude.” Like all attitudes it starts at the top, not only in your head, but at the top of the company. Think safety—act safely.
Workers Compensation—WC is always a hot topic, especially in California. It’s a political football, and the unions are the referees. The best thing a manager can do is to take aggressive action on all WC claims. You can’t sit on your hands here, because a WC claim can eat up your profits in a hurry, especially if you have to call your lawyer. WC is a living example of the old adage, “An ounce of prevention is worth a pound of cure.” Solve the WC problem at your company and you’ll become a hero. They might even bronze a statue of you and put it in front of the corporate headquarters!
4. Topic of the Month
Route audits are one of the easiest things you can do to improve your bottom line. When you do an audit, every dollar you find is all profit. You’re already paying for everything to collect the garbage--labor, disposal and equipment--why not collect all your revenue, too?
I can see him now. My accountant friend Alan Mitchell from Armanino McKenna is leaning over and whispering in my ear, “You know Ron, it’s not all profit. There are certain fees to pay in addition to the cost of the audit.” Okay, okay, Alan is correct. If you pay franchise or other fees based on revenue, those fees reduce your profit. And yes, there is the cost of the audit, but the point is that you have the opportunity to add substantial dollars to your bottom line without raising prices when you conduct an audit. Stay with me now; I’ll show you that the fees and the audit costs are a drop in the bucket compared to the profits you can find.
Let’s say you have a $4 million dollar-a-year operation with an overall profit margin of 10 percent. (I want to keep this example really simple for both of us). You complete route audits and discover $40,000 in under-payments. You might say that’s not a lot of money; it’s only 1 percent of the annual revenues. But wait a minute--let’s take a closer look.
Forget about the fees and audit costs for now and assume the $40,000 is all profit. In order to make a $40,000 profit with a 10 percent profit margin, you normally have to generate $400,000 in revenue. When was the last time you increased your revenue $400,000, or 10 percent, without a price increase?
Taking this a step further, over the life of a ten-year contract, you can turn that $40,000 into $350,000. Check this simple calculation: (This is only an example. Actual fees and costs may vary depending upon your circumstances. That’s my lawyer friend speaking.)
Year 1: $ 16,000 ($40,000, less $24,000 ($4000 or 10% fees + $20,000 one time cost)).
Years 2-10: $324,000 ($40,000 less $4,000 annual fees x 9 years).
As you can see, route audits can be a great return on your investment. They are one of the easiest and most effective ways to increase your bottom line. Don’t misunderstand me; they take time and effort to conduct. But the point is that you can earn more profit investing in route audits than you can with any almost any other cost-saving initiative.
If you’re doing route audits, congratulations! Stay the course. If you’re not, get going! There’s money to be made out there.
Good luck and happy route auditing!
5. Quote of the Month
"Never, ever, ever, ever, ever, ever, ever, give up. Never give up. Never give up. Never give up." --Winston Churchill
Actually, this was Winston Churchill’s entire speech to a class of high school students. He got up, spoke these words and sat down. Churchill uttered this famous quote during some of the darkest days of World War II. The outcome of the War is history. Your career is still in the works. If you love what you do, repeat Sir Winston’s words when times get tough. They will help you stay the course when times get tough--really tough.
I cut my teeth in this business over 40 years ago at Oakland Scavenger Company. Oakland Scavenger was a great company, steeped in tradition, which claimed its beginnings in the early 1900s and became incorporated in 1920. I learned many things about the value of having high business standards in my years there; one of the most worthwhile was that the words “customer service” mean something important. There were no two-way radios, Nextels™, or GPS to track us. Yes, we had telephones. No we didn’t use smoke signals. But what we had was a sense of pride. Pride in our work and pride in ourselves. We never thought of leaving a heavy can or an extra bag of garbage. And yes, the customer was always right.
I reminisce because a couple of weeks ago I had the pleasure of having dinner with some of my former partners. What a wonderful time! The stories were flying about the good old days, when we had as much fun working as we were having laughing and reminiscing at our dinner.
One thing that’s not so funny to think about, though, is how customer service has changed. I don’t know what’s happened in the last 20 or 30 years, but the phrase “customer service” rings hollow today. Even though our equipment is better, and we don’t have to go into as many back yards as we used to because customers put their cans on the street for us, I believe that, in general, customer service leaves a lot to be desired.
If you don’t agree, drive through your routes on collection day. Look--what do you see? Walk through your call center and listen to what your reps are saying to your customers. What do you hear? Read your complaint logs. What are your customers saying? It should be obvious. My guess is that most customers don’t feel cared for and valued. Are you giving the best customer service you possibly can give? If not--why not?
If you take exception to my commentary on customer service, let me know what you’re thinking and doing right. I’ll share your thoughts with the readership. Send an e-mail to firstname.lastname@example.org. I’d love to hear from you.
By the way, our dinner that night was at The Fat Lady Restaurant, http://www.thefatlady.com, on the corner of Second and Washington Streets by Jack London Square in Oakland (California). If you ever want a great meal and a good time, this is the place to go. Be sure to save room for dessert, because pastry chef/owner Patti Rossi will tantalize your taste buds with some of the most outrageous desserts I’ve ever tasted. One of these days I’m going to go there and have three courses of desserts. They’re that good!
“ProTips, The E-newsletter For Waste Industry Professionals” is produced and distributed monthly by R.J. Proto Consulting Group, Inc. I encourage you to share it with your colleagues and friends. You may reproduce this electronic newsletter in whole or in part, as long as you include the correct copyright notice (at the end of this newsletter) with a link to my website, http://www.protoconsulting.com.
Your submissions are always welcome. Send them to email@example.com. If I use your submission, I’ll give you credit, unless you wish to remain anonymous. All submissions become the property of R.J. Proto Consulting Group, Inc., unless otherwise requested by the writer. (Sorry, that’s my lawyer friend again).
If you would like more information on any of the above topics, contact me at firstname.lastname@example.org, and please visit my website at http://www.protoconsulting.com for more ideas on professional development and operational improvements.
Best wishes for a fantastic holiday season!
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Copyright 2003 Ronald J. Proto All rights reserved.