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Engagement Radio: Steve Goldstein - Interview Transcript

Welcome to Engagement Radio, brought you to by the Enterprise Engagement Alliance and Engagement Strategies Media. This program brings you 15 minutes of hard-hitting and important information from leaders and experts to help you and your organization profit from engagement. Today we’re talking with Steve Goldstein. Steve is the author of Why Are There Snow Blowers in Miami? and previously served as Chairman and CEO of American Express Bank. He is currently Chairman of U.S. Autosales, and is a Senior Advisor to Milestone Partners and Alvarez & Marsal. His website can be found at www.stevendgoldstein.com, and his Twitter handle is @sdgoldstein. I’m your host, Paul Hebert, and I’d like to welcome Steve to Engagement Radio.
 
Steve: Hi Paul; thanks for having me on your program.
 
Paul: I recently finished your book and I thought it was a great read. It might be helpful if you gave us quick overview of what it’s about – why are there snow blowers in Miami? 
 
Steve: The title came from an actual story…I’ll give you the short version. I was running the credit card business for Sears about 20 years ago and I was based in Chicago and I had to go to Miami in February to give a speech. I always made it a point to go into the stores to see what was going on, see what we could do in the credit card business to help improve sales and things like that. I happened to go into the lawn and garden center entrance and I saw lawn mowers, patio furniture, barbecue grills and shovels. Then over in the corner I saw a couple of snow blowers. I walked over to them – actually, I was sort of gravitationally pulled over to them – and I asked the salesman: “Pete, why are there snow blowers in Miami?” It just came out of my mouth.
 
He proceeded to tell me this story that for 30 years they kept shipping these snow blowers to Miami and Florida, they pack them up every April and send them back to the distribution center. They only had sold one in all those years to a couple that was bringing it to their children in Minneapolis for Christmas. Crazy, right? So I went back to headquarters the next day for our weekly leadership meeting, and it turned out we were out of snow blowers because of this terrible snowstorm. So I gave them this guy Pete’s card and said, “There are 4 in Miami.” They were all laughing hysterically and I asked them why they were laughing. Obviously, in a big company things like this are funny, but to me this was terrible.
 
After the meeting ended I had my assistant – now, this is pre-internet, so it took some researching – to find out how many times in the history of recorded weather had it snowed in Miami. And she came back in a little while and said it snowed one time seven years ago, a third of an inch. It seemed to me a perfect metaphor for dysfunction. In golf you get a mulligan if you hit a bad shot; you don’t get 30 mulligans. Fast forward 20 years later, when I was writing this book and trying to come up with a clever title, we looked at a million different titles but I couldn’t get this title out of my mind and it stuck, so there it is.
 
Paul: It definitely worked. When I saw the title I thought, “I have to read this.” It was wonderful to read that story, and I thought our listeners would appreciate it. So what made you decide to write the book in the first place? 
 
Steve: I’ve been very fortunate that over the course of my career, more than 35 years,  I’ve been in big companies, small companies, I’ve been in growth situations, turnaround situations, I’ve been in public companies, private-equity-backed companies and venture-backed businesses. I noticed a lot of the same things; it wasn’t a function of size or anything else. I realized that when I first started working I instinctively began leading a certain way just because it felt right and it seemed to work I didn’t put a name on it, certainly not “engagement.” As time went on I thought, “You know, this works,” and I’ve seen people that I’ve led over the years have adopted these approaches and they’ve gone on to great success, and I thought maybe I should share what I’ve learned and how things can be done differently in the hopes that others might benefit from what I’ve experienced.
 
Paul: What is the connection in your mind from the snow blowers in Miami to engagement? To me that sounds like logistics.
 
Steve: Logistics is a part of it, and logistics could have explained why it happened once. The fact that no one in senior management was visiting stores to see this, the fact that no one was speaking to employees to find out how ridiculous this was, the fact that this was going on for 30 years and people were ostensibly looking at reports that saw 4 or 5 snow blowers every year being shipped and returned, and shipped and returned. That is a bit crazy when you think about it, and to me it really stems from engagement because the fact that I saw them is partly because I went into that store for the first time. 
 
The people who worked in that store were numb. They fought the good fight. Every year they tried to get it stopped and no one listened to them, so other people also knew about this – the people who were receiving those phone calls from the store manager and others – and it just wasn’t important enough to deal with. If you think about that one little glitch and multiply it times probably 150,000 SKUs, you shudder to think about what actually is happening.
 
Paul: So why do you think companies aren’t encouraging employees to be engaged – to see these kinds of problems and take the initiative to solve them? What do you think is holding things back?
 
Steve: I don’t think there’s a simple answer. I gave a speech last week and someone asked me that very question, and I said, “There is one thing I’m sure of: No one comes into the office in the morning and says “Today I’m going to be disengaged.” They don’t consciously say that, but they are. It’s sort of like they’re unconsciously conscious about this. I think there are numerous reasons to explain why. People hate change and it’s much easier to go with the status quo because it’s safer. If you point something out, if you decide to get tangled up in that spaghetti, you start to wonder “Whose toes am I stepping on, who am I offending, and what if I can’t fix it? Maybe the best thing to do is just pretend I don’t see it.” 
 
That’s part of it. The other thing I would say is that – and I see this all the time – for leaders it’s actually more fun to focus on things that are sexy – things like launching new products, opening new markets, making acquisitions, installing new technology. All of those things are important and they’re necessary, but what they do is they take your eye off the ball in terms of the core business. And by not paying attention to the core business it suffers just from that neglect.
 
The example I gave is, if you and I owned a bakery we would work all night and bake bread and muffins and rolls and cakes and whatever. We’d open the store in the morning, we’d meet our customers, and at the end of the day we knew exactly how we did – what sold, what didn’t sell, why, why not. We might change some of those things tonight when go do the next day’s baking. If you’re an executive sitting in an office in some tower and you’re a clerk somewhere else 3,000 miles away, there is no connection between those two people. You just don’t know. You’re basically uninformed. I think the issue to me is how do you get informed? How do you really find out what’s going on? When you do that it’s very clear to your employees that you’re sincerely interested.
 
Paul: One of the things that we’re finding with the whole engagement space and the fact that enterprise engagement is now coming on strong is that leading pension funds are now asking companies to disclose information on human capital, especially in the area of engagement and how much they’re spending. Do you think that’s a good idea? Do you think it’s important to have some sort of function that lists out what companies are doing from an engagement standpoint?
 
Steve: I do. But I think there’s a significant risk with this approach in that it becomes a box-checking process and companies will figure out very quickly how to comply and conform in order to satisfy whatever the requirement is. That’s just going through the motions. I think one of the issues with engagement is when you see it work it’s great, but it’s really hard to measure. To come back to your question, I generally prefer the carrot approach to the stick approach – what you’re describing is more of a stick in terms of funds pulling their investments in a company. Instead, what funds might do is reward engaged companies with greater investment dollars based on their commitment to doing certain things – which by the way will show up in the results because they’re going to get a better return than investing in other companies. You may need a stick too, because normally you need both, but I would sort of lead with the carrot.
 
Paul: How can an organization take what’s in your book and actually leverage it? Is there an easy answer to that?
 
Steve: Well, it’s an easy answer but it’s hard to do. The easy answer is that rivers flow down, rivers don’t flow up, and so I think everything emanates from the CEO.  They clearly set the tone, they set the cadence, they set everything, and in my experience it has to begin with the CEO. They need to believe that engagement is critical and it’s well within their grasp. It’s one of the few things that doesn’t require a lot of money, but it does involve their commitment and their belief that it works.
 
Now, if you’re not familiar with this as a leader, it could seem a bit daunting because you’re going to need to be a little different in terms of how you approach everything and everyone. In my book I explain that the great news is you don’t have to bet the ranch, you can take baby steps, you can try simple things, get good at it, see the results, build on those successes. Once you do that you’ll be sufficiently rewarded to see that it works and your leadership team will see a change in you, they’ll start modeling those behaviors, and before you know it it starts to flow through the organization.
 
I’ve seen this happen so many times and it’s a beautiful thing to see. When the employees actually feel that they’re valued, as opposed to being viewed as a cost. That they do have knowledge, that they do know what their customers like and don’t like, that they do have suggestions of what the company can be doing better and differently and that someone is actually asking them what they think and would actually act on those suggestions. You take what is a vicious cycle and you turn it into a virtuous circle, and that success begets more success. I’ve seen this in so many situations where it just sort of takes on a life of its own.
 
Paul: I know we’re running a little bit long, but is there one last piece of advice you might want to give people who are thinking about engagement – how you think they could impact engagement in their organization? 
 
Steve: The one thing I would say to people is just, in the course of a day, reach out to 3 or 4 people that you’ve never talked to before and just ask them how it’s going. You’ll be amazed what they’ll tell you. Just that simple question: “What’s going on in the business?”
 
Paul: Steve, I really appreciate you taking the time to chat today. Again everybody, the book is called Why Are There Snow Blowers in Miami? Transform Your Business Using the Five Principles of Engagement, and Steve’s web address is www.stevendgoldstein.com and his Twitter handle is @sdgoldstein
 
Steve: Great speaking with you Paul. Thank you.