Why Are There Snowblowers in Miami?

Steve Goldstein: Well, perhaps the best way to answer that is to tell you a quick story of how the title came about. I was working at Sears, as you mentioned. This goes back about 20 years ago. Sears is based in Chicago, it was February, it was freezing cold, and I had to go and give a speech in Miami to a trade association. And as I often did, I would go visit a Sears store to talk to employees and to see what we, in the credit card business, could do to help generate more sales.

And so, I had a little extra time. And the particular entrance I walked into was the patio and garden center, and I saw all the things you would expect to see there. I saw lawn mowers, patio furniture, shovels and rakes, barbecue grills – all of that stuff. And, then, in the corner I saw what looked like four snowblowers. And so I just walked over there, because I wanted to make sure I wasn't hallucinating. And sure enough, there were four snowblowers on the sales floor in February, in Miami.

So I went over to a salesman, an older fellow, and he had his name badge, "Pete." And I said "Hi Pete." I introduced myself and I said, "Why are there snowblowers in Miami?" He looked at me and he goes, "Well, we get them in September. We're told to put them on the floor, and we box them back up in April and send them back to headquarters." And I said, "How long has this been going on?" And he said, "Well, I've been here about 30 years, so, as long as I've been here." And I said, "What do you do about it?" And he said, "My boss calls headquarters and the store manager calls headquarters, and they tell them it's part of the national allocation." And I said, "Do you know what that means?" And he said, "No."

So I laughed and I gave my speech. I went back the next day to headquarters. We were in the middle of one of these polar vortex storms in Chicago and, of course, at our leadership meeting the discussion was this snow storm and the effect it was having on the supply chain. And, not surprisingly, we were out of snowblowers. They were stuck in a warehouse in Minnesota, that was at the epicenter of the storm. So I said jokingly, "I know where there are four. And here's this guy Pete's business card. Why don't you call him up? At least you have four!" So everybody laughed, "Ha, ha, ha," and then the meeting ended.

And, walking back to my office, I was really very disturbed, and I asked my assistant to stop what she was doing and to find out, in the history of recorded weather, how many times had it snowed in Miami. She came back in about 45 minutes and said it snowed one time, seven years ago, a third of an inch.

And so, that made an indelible mark in my mind, and I started to think about all of the experiences I had had prior to that, and then all of the experiences I've had subsequent to that. And I realized that there's a real problem related to disengagement. And I felt compelled to write the book because I thought that I had seen both what worked and what doesn't work, and thought I could provide some guidance to leaders about how to look at their businesses differently, and try to avert their own "snowblowers in Miami" scenarios.

Rachel Salaman: You have got an impressive background as a senior executive in a number of companies, and you've mentioned that you've seen disengagement throughout your career. How big a problem is it?

Steve Goldstein: I think it's huge. And I think part of the reason it's huge is no one sees it. Someone told me this a couple of weeks ago. A friend of mine was trying to sell his house – and they had lived in the house for about 25 years – and when the realtor came to appraise it and tell them what she thought they should ask for the house, as she was walking around the house, she started pointing out a lot of things she saw that made the house unattractive. Faded carpeting, torn upholstery, window shades that were broken, and on and on.

My friend and his wife were really surprised to get this feedback. And he said to me, "I realized we'd been looking at this every day, and we didn't even notice it. It just was."

And I think that's what happens in a lot of companies. People do things a certain way, many times by rote, and after a while they don't realize it. I mean no one actually chose to put these snowblowers in Miami. And you could say, well, the first time they got there, it could have been an honest mistake. But not for 30 years. And eventually everybody gives up. They just realize there's no point in asking questions. And so, if you look at the issue in that context, in many cases it's quite pervasive.

Rachel Salaman: So, people being used to the way things are done and not challenging that is one thing that lies behind this kind of disengagement. What else is behind it?

Steve Goldstein: I think there's a lot of things. One is that, if you see something, then you have to decide whether you want to deal with it or not. And if you deal with it, it's sort of like untangling spaghetti. You're not exactly sure what's going to happen. You're not exactly sure whose toes you might be stepping on. You're not exactly sure what problems you might be uncovering, and you don't want to rock the boat in many cases.

And we're not talking about fatal, or cataclysmic, or life-and-death matters, because, I think, in those situations people do raise their hand. And, clearly, the fact that snowblowers were in a store in Miami is not the end of the world. But as a metaphor, it's very indicative.

And so, I think, most kinds of issues like this fall into this category. They don't fall into the "make or break" category. And I think it's just easier to step aside and not see it. And choose not to see it.

Rachel Salaman: You've developed what you call "Five Principles of Engagement," which is the basis for your book. Are these principles aimed at people who want to increase their own engagement or are they designed to help leaders get other people to be more engaged?

Steve Goldstein: That's actually a terrific question. And the answer is both. But it has to start with you, as the leader. I'm a firm believer that leaders have to lead by example. And it's too easy for a leader to say, "I've got to get my guys to become more engaged. So let's have some training programs and let's give them some books to read. Let's go to an offsite meeting. Let's do all of these things that most companies do." But unfortunately, they typically don't work that well.

I found that what works really well is, for the leader, whether it's the president of the company or the head of a division, or the head of a department, however you define this, depending upon who you are, you have to first decide that you want to engage. And once you decide you want to engage, and start exhibiting certain behaviors and utilizing some of the principles that I describe in the book, very interesting things happen, where your followers start to realize you're behaving differently. And it actually gives them the permission and encouragement for them to start behaving differently. And that's when the magic happens. Without that, then it's just a bunch of checklists and discussions to talk about things. But really, nothing fundamentally changes.

Rachel Salaman: So if employees are more engaged with their work, it would make sense to empower them as well, so they can take initiative when they see something that's not working. In your view, what's the relationship between engagement and empowerment?

Steve Goldstein: I think there's a very significant relationship. If you're engaged and you're motivated, and you feel like you're valued, you can do all kinds of things to do your job better.

I'll give you an example. I was going to Asia in the Fall and I was leaving, literally, in a week from whenever this happened. And I had this pain, and I went to go see my doctor and he said, "You need to have a CAT scan."

So I went to go get the CAT scan. And this was a Saturday. It was the first appointment I could get. It turns out that I'm allergic to iodine. And the trace element they give you has iodine in it, and so I couldn't take the test. And she said, "They should have told us you're allergic to iodine." I said, "Well, they didn't." And so the test was waived. And I said, "Look, I really have to have this test because I'm going to Vietnam. I can't go if I have a problem." This nurse said to me, "Don't worry. I've got it." And I said, "What do you mean, ‘you've got it'?" And she said, "I will make sure we fit you in, even if we have to move someone else who has an appointment." And she gave me her personal number etc.

That was on the Saturday. So I had to get a prescription. And I won't bore you with all the details, but I had a lot of rigmarole to get through. And I was leaving on a Thursday. And the Monday I called, and she got me an appointment at five o'clock on Monday. I thought to myself, how amazing is that? That this woman, who doesn't know me, just took some authority and used her better sense of judgment to make the right decision. I wound up calling her a few days later to ask her about this, and she basically said that the hospital staff was really focusing more on customer or patient satisfaction.

I tell you that because it's humbling, and it's gratifying to see that, when given the right tools and motivation and leadership, employees can do the right thing.

Rachel Salaman: It is great when it works out. But how can a leader trust all their employees to make the right decisions, when they're taking the initiative in any given situation?

Steve Goldstein: You don't want to have anarchy. You can't have everybody doing whatever they feel they want to do, especially with a large organization. Large organizations need to have some modicum of control to ensure predictability, scalability, quality, etc. And I found that the way to do this is really to lead with principles, so that people understand. Because principles, by their very nature, are somewhat malleable, whereas rules are very rigid. You either can do this, or you cannot do this. And you're forcing people to make binary decisions.

But life is not black and white. Life is mostly gray. And so, if you can start to educate your employees about what it means to operate in the "gray zone," and what the boundaries are on both sides of the rails, if you will – if you think about a train running on rails, you don't want to go on either side of the rail. But if you could operate within that defined space with some principles, and give people some more latitude, I think with proper training and leadership most people will make the right decision, most of the time. That's been my experience.

Rachel Salaman: Let's talk about your five principles in more depth now, starting with the first one, which is "fresh eyes." What do you mean by this? What does this look like in practice?

Steve Goldstein: "Fresh eyes" really means to look at things from an "outside-in" perspective, as opposed to an "inside-out" perspective. It's as if you were walking into the organization through the front door for the first time. What do you see?

And I've done a fair amount of consulting and advising in the last eight to 10 years. And it's clearly an advantage that any outsider has over someone inside that, by definition, you come in with fresh eyes. And you see things for the first time, and you make judgments as to this is working, this is not working.

The real question here is, how do you do this without bringing in outside help? Because a lot of people don't want to do that, or can't afford to do that, and it's something that's not repeatable. And so you have to learn how to do this yourself. A lot of this has to do with being open-minded. And I talk about, in the book, some techniques for how to do this, because it's a learned skill. It's not a skill that people instinctually have.

If you go visit a new country on vacation, you go with fresh eyes, because you've never seen this place before. If you go there 10 times, you start to see things that might not even be there. So how do you do that when you're in the same place every day?

To me, that's where it starts. Because once you learn how to adapt an outsider's perspective, that creates insights for you. And then you can start to actually go attack some of the other issues. Because the issues are there, you just have to find the right lens to look through to see them. It's there.

Rachel Salaman: So can you share, perhaps, one of those techniques that might be useful?

Steve Goldstein: One of the biggest techniques is to get out of your office. Nothing good comes from being in your office. You have to get out of your office and meet with the two most important constituencies in the business: your employees and your customers. And, in many companies, the employee who deals with the customers is the most junior person in the company.

If you think of a retailer like the Gap, you're dealing with an hourly employee who is a cashier or who's a sales clerk. And that person is interacting with the customer, not the senior vice president of marketing, not the chief financial officer, not the head of logistics, not the head of stores. And so that customer's experience is shaped, in large part, by their experience with the one person they're interacting with, who is this clerk. So if you're not aware, as a leader, of what the issues and problems and opportunities and challenges are that they face, well how can they do a good job?

Let me give you an example. I was in a store a couple of weeks ago to buy something, and there was a woman in front of me who wanted to return a sweater. And it was her turn, and the woman behind the counter says to her, "Well, you can't return this here because you bought it online." And so the customer said, "Well I see right over there that you have the same sweater. I just want to exchange it from a small to a medium. And you have it there." She said, " I know we have it there. But you can't do that because you bought it online."

So they went back and forth a few times, and finally the customer, very, very enraged, said, "All right. I'm out of here! I'm never going to buy anything from this company again!" And she steams out. I could see by the face of the employee that she was not happy either. She knew this was stupid. She knew that whatever the policy was didn't make sense.

I think I know what happened. What happened is that there are two different businesses within this company. There's an online business and there's a retail business. And they probably have two presidents and two siloed organizations, and they don't communicate with each other. They have different P&Ls, they have different compensation programs, and so both of these leaders are focused on growing their respective channels.

Now, if either one of these people were standing in a store for a day, or standing behind the counter, and would have observed these kinds of behaviors and transactions, you have to hope and believe that they would realize it was insane, and they would go back and figure out how to change whatever processes needed to be changed, in order to allow the customer to do something that was totally reasonable. And yet they did not know this happened, because they weren't present. They didn't see these interactions. They never were in a situation where they talked to the sales clerks to find out from them what was going on, because they don't do that, and they had no basis for really talking to customers. So they were blind to this.

And you can take that example and multiply it millions of times, and these are the situations that occur every day in business. And so, if you're sitting in your office, you have no way of knowing this. You don't find this out reading reports. You have to be out there, amongst the people, and rolling up your sleeves and getting your hands dirty and seeing what's actually going on. Because I will tell you, when I think back of the successes that I've had, I would say that the vast majority, if not all of them, were grounded in getting feedback from real people, either customers or employees or both.

Rachel Salaman: The second principle of engagement is "hot buttons." What are these?

Steve Goldstein: I start with the premise that most organizations are drowning in information. You can get so many reports that, for most people, they don't know what's important. And you can't focus on everything. And so what I realized is, it's really important for a leader to decide what are the two or three really "critical levers" that make all the difference in the world in the business. That if you do these two or three, you're going to win and if you don't do these two or three, you're going to lose.

There are probably several dozen other levers that are interesting and nice and fun, but they don't have the materiality that the "hot buttons" do. And so, once you figure out these "hot buttons," you have to communicate them to everyone in a way that is understandable to every single person in the organization – from the context of, I need to do my job to effect a better outcome of that hot button.

I'll give you an example. So, I'm chairman of a used car business in the south-east, which a private equity firm that I'm with acquired in June of last year. And I had gone to an industry conference and everybody kept talking about the number of days of inventory they had for cars for to be sold. When I went back to the office a couple of days later, I asked the question to the leadership team, "How many days of inventory do we have?" And I got a lot of different answers, and I realized none of them were the right answer, and they really weren't sure. And in buying this company, we just put an enormous amount of debt on the company, and part of that debt is to fund the cars. It's costing us a lot of money to do this, and I said, "How much do you think it's costing a day for each car?" And no one knew. And so we did the math together, and it turns out it was about $2 a day, for each car.

So, I said, "Let's think about it this way. Let's say we have 600 cars, or 1,000 cars, and they're sitting here an extra 30 days. Figure out what that's costing us, right off the bottom line. So we've got to really focus on inventory." That's all I said. The meeting ends.

One of the guys goes back and tells his team about this "$2 a day" thing. This person was the fellow who is in charge of reconditioning the cars. So we would buy used cars. We would recondition them to make them really great, and then sell them in the used car lot. And his job was to do all of that. Within one week of this meeting, he came back at the next week's leadership meeting, and basically said, "I told my guys about the ‘$2 a day,' and they realized that they were checking the parts board once a week, to see when the parts came in. But now that they know it's costing us $2 a day, they're checking the parts board every day. And guess what? We're getting the cars out three days faster, even in one week."

Then, he goes on to say that they identified one of the lanes. They called it "money lane," because if the car is in that lane, it's sitting too long. It's costing us money. This was a group of mechanics and supervisors who, on their own, figured out what they needed to do to attack this ‘$2 a day' inventory cost.

And I will tell you that, every week following that, the leader of that team would report to us, each week, about new things his group has done. All of which were saving us a ton of money. Plus they were having a lot of fun because now, in addition to fixing up the cars, they saw that they were having an impact on the company. And the best part of all is there were no meetings about this. There were no PowerPoint presentations about this. They just did it themselves, with his direction and guidance. But it was all self-initiated as a result of them rallying around, in this case, that one hot button.

So, it shows how powerful these hot buttons can be, when everyone in the organization, whether you're a divisional leader or a mechanic or whatever, can understand what it means, and take the appropriate action.

Rachel Salaman: We talked earlier, about "connecting," which is your third principle of engagement. And you told us how leaders should interact more with employees and customers. Your fourth principle is speed. What do you mean by that?

Steve Goldstein: There's a great quote by Mario Andretti, who is a famous race car driver, who said, "If your car is being driven under control, you're not going fast enough." The reality is, to me, that we're living in a time where time is your enemy. And if you're not able to move quickly, lots of opportunities can be missed and lots of potential threats can come to fruition.

The best example of this is comparing large organizations to startups. Large organizations think of things in terms of months, quarters and years, in terms of how they organize their activities and how they plan things. Startups think in terms of days, weeks and months. And the reason's very simple. By definition a startup has nothing. So if they're not constantly creating and moving forward, they're dead.

That kind of mentality, of constantly pushing, constantly changing, trying to figure out what makes it work, and doing it with a restlessness, is something that is a real strength of startups. In large organizations they'll say things like, "We'll take that up next quarter," or, "Let's 'bake' that into next year's operating plan." You can be saying this in March by the way, so imagine you're saying in March, "Let's put this into next year's operating plan and budget." Well, that's at least a year before you actually do whatever that is, and the world could change radically in that time period.

So, not having this sense of urgency, I think, is really critical. And so what I advise people is& you really have to think like a startup. You have to move faster. You have to make decisions more quickly. You may not be able to get all the information you'd like to get, but you have to really solve for speed.

Rachel Salaman: Let's talk briefly about your fifth and last principle, which is "transparency." How does that help engagement and what does it look like in practice?

Steve Goldstein: It really stems from making sure people know what they need to do to do their jobs. It's the opposite of having too much information. This is where people don't have enough information. I think that the more people know, to be able to do their job effectively, the better they're going to be able to perform. And in the book, I have many examples of when this works well and when it works poorly. And the outcomes are markedly different. And, in almost every case, it was enabling people to have the right information, at the right time.

Rachel Salaman: And that's about communication channels, as well as deciding what information should be communicated?

Steve Goldstein: Yes. What, and to whom, exactly.

Rachel Salaman: So from your firsthand experience and the research that you've carried out on this topic, what do you think would be a good starting point for leaders who want to improve the engagement in their organizations?

Steve Goldstein: Doing this doesn't cost a lot of money. And it really starts with deciding that you, as a leader, need to and want to be engaged. If you don't do that, then you're just going to go through the motions. And like anything else, just going through the motions is necessary but not sufficient to be successful.

To really be successful, I think, you have to fundamentally embrace whatever it is, the goal that you want to achieve. And, if you believe that being more engaged ultimately improves performance, then you, yourself, as the leader, have to decide you're going to take it one step at a time. And the great thing about this process is you could do it at whatever pace you want to do it. It's not a race. There's no clock. And, I think, what most people find is, if they start slowly and they start to see some good results, it gives them the resolve and motivation and belief that they should do more. And when they see their people positively responding to the changes they've made in their approaches to them, I think they realize that it's working. Just the same way that everybody in this car company has rallied around – what this team has done, it's remarkable. And other people are starting to try to emulate what they're doing, because they see that it works.

Once people start to see some modicum of success, that gives them the incentive to do more. And it's sort of like a flywheel. Once you start it in motion, it starts to rev at a much higher level and it sweeps up the things in its wake.

So, it starts with you, as the leader. And let's say you have eight or nine people on your leadership team. You've got to get them to buy in, and then each of them has 10 people. And before you know it, you have several hundred people doing this. And once it starts, it can't stop. Because it's so good, you wouldn't want it to stop. But it has to start with the leader starting.

Rachel Salaman: Steve Goldstein, thanks very much for joining us today.

Steve Goldstein: It was my pleasure. Thank you.

Rachel Salaman: The name of Steve's book again is, "Why Are There Snowblowers in Miami? Transform Your Business Using the Five Principles of Engagement." I'll be back in a few weeks with another Expert Interview. Until then, goodbye.