An Open Missive to our Federal Elected Officials: Who Polices the Federal Government in Following Hiring Practices?

As a dual-service, disabled veteran, possessing two master-level degrees from accredited colleges and engaged in the pursuit of a Ph.D., I am finding, from personal experience and in speaking to others pursuing employment with disabilities, discrimination is alive and well.  I can understand the discrimination in private sector hiring; I do not like it but understand it.  Risk, costs of health insurance, and costs of doing business increase when hiring those with disabilities.  I do not see government as a “jobs program” in any way; however, the government has taken it upon themselves to enact rules specifically to hire those with disabilities.  Thus, the government should be more open to hiring those of us with disabilities.

People ProcessesFederal Government hiring procedures provide two hiring paths, competitive and non-competitive.  Under competitive, there are several ways of being placed ahead of others and points are awarded for certain hiring preferences, of which being a veteran is but one.  In non-competitive hiring, Schedule A provides for disabled people to sidestep the traditional, or competitive, practices of hiring to have an opportunity of obtaining employment without having to compete with candidates not experiencing the special conditions caused by disability

Disabled people are supposed to be able to employ Schedule A hiring practices for Federal Hiring because disabled people know how difficult it is to be hired for the private sector, city, county, and state government hiring.  Here is where those in hiring positions for the Federal Government are able to bypass the system and not hire disabled people:  no one is policing hiring.  I was informed, very politely, by the Inspector General’s Office that they do not inquire or investigate compliance with regulations for hiring.  The question to you, elected Federal Officials: who polices and ensures compliance with written protocols established by OPM for hiring?

As a disabled veteran, hiring in the private sector has become more difficult as my injuries have become more noticeable, from fall 2010 to present.  Having a disability that is nerve based, causing tics/twitches/spasms, hiring officials acknowledge directly or indirectly that since my cost to employer-based health care will come with a pre-existing condition and higher overall costs in ADA compliance and loss of potential (blue) money, I become the “candidate to beat,” and finally will be told, “you are overqualified,” “you are over-educated,” or my personal favorite “you are not a good fit.”  Thus, after four consecutive years of seeing my ability to be hired in the private sector diminish, I began more heavily pursuing employment with the Federal Government.

In June 2016, I was, finally, awarded a Schedule A letter to add to my documents in Federal Hiring.  With the Schedule A letter, I was provided OPM training on how to be “Direct Hired” and walked through the OPM website governing the policies that govern Schedule A hiring and disability hiring for the Federal Government.  Since the award of the Schedule A letter, I have had a VA hiring official refuse to use the letter claiming VRA and VEOA are both more efficient, and then not hire me for being “overqualified.”  I have experienced hiring managers tell me that “Direct Hire” authority lies with managers, and you need to know those managers to employ Schedule A preference, but the hiring managers cannot tell you who else to speak with to receive Schedule A hiring.  The absolute best excuse has been a hiring manager’s claim that there is no such thing as non-competitive hiring, that all applicants must be hired under competitive hiring standards, and then proceeded to tell me I am not qualified for the position because my degrees were not specifically those desired in the advertisement, even though the advertisement did not specify a specific degree, other than master-level.  Most recently I have been offered positions so far below minimum pay levels only because the government knows that desperation often breeds compliance, even if compliance creates actual harm, all in the name of some future date of possibly being hired for the wages qualified for at the time of hire.

Hence, I emailed the Inspector General’s office regarding these circumstances and received the following reply, “The Inspector General’s Office does not monitor compliance with hiring in the Federal Government.”  Thus, Elected Officials, I ask you, “Who regulates and ensures compliance in hiring for Federal Government positions?”  “Who is accountable for OPM regulations being adhered to by local hiring decision-makers?”  “Where can those who are disabled and trying to work turn for a reconciliation of just grievances?”  You, the elected officials, created this hiring system with preferences for disabled people to find work with the Federal Government, so who is policing the hiring for you?

I have now contacted elected officials in four separate states while living and voting in those areas, Ohio, Arizona, Utah, and Michigan, asking the representatives of elected officials directly the same questions posed in this missive.  Senator McCain’s office was the most oblique and obtuse claiming that if hiring practices are not being followed it is due to a lack of training somewhere, but the issue is not important enough for the senator’s time.  Upon arrival in New Mexico, I asked about hiring at the VA Hospital in Albuquerque and was told by several officials at the VA Hospital that the HR Department was under extra scrutiny due to a significant lack of following the hiring guidelines for Federal Government hiring; but, none of those people could tell me who polices the hiring practices and ensures compliance.

Why is this important; because disabled people are not receiving the kind of hiring support they need.  With the current costs to business operation in the private sector, I can understand, I do not like it, but I can understand, that hiring those with disabilities is going to be a major cash outlay upfront with increased risk.  As a business professional, I understand the risk/cost structure, and I understand that the speed of business dictates finding the lowest cost/risk, candidate.  For the city, county, state, and Federal Government positions, I cannot fathom why disabled people are dragged through such egregious hiring practices.  I did an unofficial survey of 25 Federal Government, NM State, Bernalillo County, and City of Albuquerque employees asking them one simple question, how long did it take for you to be hired initially.  The answers ranged from multiple months to 5 years of constant applying.  If the employee had been promoted, I asked how long did the employee wait for the promotion, and the answers ranged from 3-months in the initial position to 15-years.  As a business professional, I can confidently say this is where enormous amounts of blue (potential) money are being wasted, and as the axiom goes, burn enough blue money and green money, in this case, taxpayer funds, evaporate!

Ways to fix the hiring issue:

  • USAJobs.govEach Federal Government office needs to have a single person solely responsible for Schedule A and all other direct hire authority programs that non-employees can communicate with to apply directly to that organization. All open positions would run through this office first providing the option to request Schedule A preference, and upon that selection, USAJobs.gov would automatically drive the applications to the single person responsible for direct hiring and provide this person’s name and contact information to the applicant.
  • Stop the redundant efforts. Once a background and reference check has completed for one office, make this information available to all offices for 365-days.  With applicants making multiple applications to several different offices, this alleviates contacting those references multiple times, duplicating work, and wasting resources.  The technology to share is already available, and this is a low-cost, high-return option to invoke.
  • Every worker in government expects everything to take an inordinate amount of time to complete work. The longer the waiting game takes, the more potential (Blue) money is wasted exponentially.  Start shaving unproductive hiring practices, processes, and procedures.  Streamlining the hiring process overall is needed!

Blue Money BurningConsider the following as a general guide.  For every five dollars of blue money wasted, fifteen to fifty green taxpayer dollars evaporate.  Thus, when a position is open, the lost potential is the annual salary of the new hire for every month the position remains open and unfilled, and the green money loss is the annual salary of the position open every two months.  Between others having to work harder to cover the open position (Blue), the added strain and stress of working shorthanded (Blue), and the lost productivity of the entire team including the costs of long-term planning (Blue), along with other factors, are “hidden costs” of conducting business.  In the blue money loss, the green money evaporation is found in less time for maintenance, tools, and people are used harder and longer, overtime for important deadlines, and commitments lost are all, but not a complete list, of green money evaporation pits.

  • While not directly a hiring practice, reducing employee churn, training, and promoting more quickly is a best business practice. The people in government make the government, and I am not the only customer service professional pointing to government offices as the epitome of incompetent people wasting resources and destroying morale and customer relationships.

Case in point, at the Regional VA Office in Phoenix, AZ, three people regularly man the front desk and are the face of this VA facility.  Of these three, one person is incompetent and intentionally mean, remarking in demeaning and insulting tones to questions and speaking ill of the veteran they just “helped.”  One is trying and means well.  The third could not be hired to clean road kill off streets and is completely and utterly a drone, for example saying they are working on a task but never accomplishing anything productive.  Several times while being harassed assisted by these individuals, I witnessed the third person asking for help from another employee to staple forms together, asking “where does the staple go in the form again?”  Hence, I was not surprised when Phoenix became the face of incompetent and heartless government workers literally killing veterans.  Clean house of the deadwood, replace with hard-working people and streamline the process of work to reduce the opportunity for drones and hacks to manipulate the system.  Of the 10-15 people that regularly float through the Phoenix VA Regional Office Front-Desk/Waiting Area, I think two might actually be working.  The rest seem to have an amorphous purpose doing ambiguous work in a cloud of confusion taking taxpayer wages for no productivity.

  • Customer service improvement begins internally, employee to employee. Want to slow churn, improve how employees serve each other.  Want to reduce churn significantly, get the supervisors, team leaders, and other organizational leaders out of the office, onto the production floor, and actively exemplifying customer service and professionalism.  Improve employee to employee customer service and departments like the VA and DMV will immediately begin to change their horrendous reputations.

I am not the only person in this country paying taxes and angry about the drones and dregs hired to conduct government business.  It is past time to demand accountability for the taxpayer money waste at all levels of government.  Decreasing waste begins with improved hiring, respect for the government they work for by being honest in their employment, and increased regard for the people they serve.

When an employee commits a crime, they should be able to be fired and never re-hired by the government, then held accountable in a court of law for their crimes.  When an employee does not pay their taxes while working for the government, they should be fired and never re-hired, then held accountable like every other citizen not paying their taxes.  To hear about government computers full of porn, child porn, and online gambling, tells me there are workers that are not being supervised properly, work is not being done, and the supervisor and the offending employee need to be fired and never re-hired, then held accountable in a court of law for their crimes.  Being paid to work and not working is theft!  Child porn is a crime!  Watching porn on a computer while being paid is both sexual harassment and theft, both of which are crimes!

The taxpayer receives a slap to the face when federal, state and county government employees are caught gaming the system for personal profit, are not required to remit the monies ill-gotten, and are not fired, or worse are fired and an obscure union regulation returns them to work at the same salary and position of authority, or worse are promoted after being returned to work.  These are failures in treating people properly, honoring the tax dollars invested, and reflecting a failure of elected officials to supervise government workers needed to run the government.  When will our elected officials become the leaders we are paying them to be, holding those malfeasant characters legally and morally accountable and removing them from employment in government?

Your'e HiredWe hired you, the elected officials, to run the government for us, not to enrich yourselves at our expense, and not to allow nefarious and untrustworthy people to lie, cheat, and steal our tax monies and keep being paid with our tax money!  More egregious still is allowing those who have abused the power of government to cause harm, then allow those abusers to quietly leave the government with their pensions, and no criminal charges are ever pursued, e.g., Lois Lerner among many others.  When you want to know why the approval rating for elected officials is so low, look no further than the issues raised in this missive.  Fix the problems!

What “Going the Extra Mile” means in Customer Service: A Call Center Labyrinth

cropped-snow-leopard.jpgI met a unique call center representative, who when asked by management to “go the extra mile for the customer,” remarked, “I go the extra mile for the customer by simply answering the phone.”  Recently, “going the extra mile” has resurfaced as a customer service topic, and I think we need some parameters for understanding the term to really appreciate what it means to “go the extra mile.”

The saying, “go the extra mile,” has origins in the beatitudes as discussed in the New Testament, which includes a discourse on when asked to walk a mile with a person, go with them two.  Obviously, the customer service representative, especially in a call center, cannot walk with the customer two miles.  Thus, what exactly and specifically is intended when management wants the representative to “go the extra mile?”  Think about this for a moment.  In a metrics measured call center, does the representative have the time to engage the customer in idle chit-chat and remain productive per the parameters?  Is the representative expected to perform an account analysis for the customer while answering the customer’s questions and extend the call to ensure each customer is taking the fullest advantage of the available products and services offered?

In a related question, what organizational policies are prohibiting, interfering, or downright anathema to the agent “going the extra mile?”  As an agent, I worked in a call center with this exact problem; the company instructed agents “go the extra mile” for every customer, but then discouraged agents with policies, procedures, and back office personnel whose sole purpose, it seemed to the front-line agents, was to always say no before yes.  When these issues were brought to the attention of the business leaders, the solution was to add more bureaucracy and another person to the back office, which further complicated delivering upon the customer service commitment.

Raising the first point for “going the extra mile” organizational support for delivering a higher level of customer service.  If the front-line agents are being asked to “go the extra mile,” the entire organization already needs to be delivering a higher level of support to the front-line agents.  Business leaders, “going the extra mile,” begins with you exemplifying the “go the extra mile” attitude.  Then, get into the “how” of work performance including the logic of processes and procedures, the reasons “why” business is done in the manner and style of your organization, and smooth the transitions between the front and back office.  The best approach for this is to take each business process from origination in customer service and walk it through every whistle stop in your business to completion, and at every stop asking “why.”  I guarantee you will find ways and means to improve the process every single time.Kindness Quote

Second, when someone is asked to “go the extra mile,” it is human nature for that person to ask or think, “What is in it for me?”  If there is no discernable value in “going the extra mile,” the person asked to put forth more effort could become hostile, depressed, and/or simply put less quality into the action wasting potential and defeating the purpose of “going the extra mile.”  There will always be a psychological value aspect to this discussion.  As a business leader looking to deliver a higher level of quality service, are you prepared to reward agents for “going the extra mile?”

Third, be specific, detailed, and precise in communicating what is meant by “going the extra mile.”  My unique colleague has a point.  If the agent considers answering the phone “going the extra mile,” how will you as the business leader address the need to act differently?  Some might think my colleague was flippant in answering as he did, but the callers at this time were more hostile than normal, technology was changing and customers were experiencing more problems than normal with the services provided, and due to employee churn, all the agents were being asked to work longer hours.  It takes real courage in these difficult circumstances just to answer the phone, let alone resolve customer problems; forget “going the extra mile!”  As a business leader, are you fully cognizant of the issues in the front office?  When asking for an agent to “go the extra mile,” have you specifically defined what this means, detailing actions that fit the description, and do you know it is possible for others to accomplish?

Speaking of accomplishing an action, on the day I was hired as a call center agent, the call center had a six-month backlog of work in the back office, meaning six months prior to my date of hire a customer had requested a bill credit or some other change, and the issue remained open on my date of hire.  After 60+ hour weeks, for three months, the backlog had been reduced to 45-days, and this was considered acceptable by the business leaders.  Thus, the front-line agents had to be prepared to explain why it would take a minimum of one and a half billing cycles for the change to become visible to the customer and encourage the customer to continue to make the payments as shown on the bill to keep from suffering any adverse consequences.  Being possible to accomplish requires business leaders to know what is happening in the front-office and the back-office simultaneously and understand from the customer’s point of view the “why” behind business processes.

Fourth, training as an ongoing, regular, and value-added action is necessary.  Too often training is considered “one and done,” and then annual compliance training is required that everyone suffers through.  If this is the attitude of training in your call center and the training is not value-added, as in “is the training useful immediately” and the value apparent, there is a failure in training, a failure in leadership, and the failure is visible to customers.

The Extra Mile Just Ahead Green Road Sign Over Dramatic Clouds and Sky.I worked as an agent for a great call center that believed in ongoing training at the team level where front-line managers held daily training and the trainers held monthly refresher and targeted performance training.  The problem was that no one measured the training for value, and the agents began to see the time off the phone for training as an exercise in futility.  Value-added is a critical component of ongoing training and begins with asking where are you, as an agent, struggling?  Value-added training ends with an agent overcoming that specific struggle and growing to find another struggle and knowing that training is there to aid them in finding a solution to the new struggle.  Build value-added training as an ongoing conversation, which will be visible to the customer, and the agent is prepared to make the opportunity to “go the extra mile.”

Is the difference clear?  Be specific, clear, and concise when directing “going the extra mile,” and agents will begin testing the waters for organizational support based upon their current levels of knowledge.  Agents will want to make opportunities to “go the extra mile” when they are properly trained and are confident in the training to help them meet the customer’s request and desires.  Agents will make opportunities to “go the extra mile” for customers when they are confident that the business stands behind them in processing, in a timely manner, the agent’s requests made on behalf of that customer.  Agents will make opportunities to “go the extra mile” when their leaders are exemplifying “going the extra mile” for internal customers.Extra Mile  Agents will create opportunities to “go the extra mile” when there is value to them personally for the extra effort and when “going the extra mile” does not harm their scores in a metric based call center.  Finally, agents will create opportunities to “go the extra mile” when they know specifically what “go the extra mile” entails; remember, amorphous feel-good lines do not clear instructions make.

© 2018 M. Dave Salisbury

All Rights Reserved

The images used herein were obtained in the public domain, this author holds no copyright to the images displayed.

 

The Johari Window: A Tool of Incredible Proportion – Understanding a Key Psychology Tool in Call Center Relations

The Interest GridTo understand a principle takes time; to apply that principle involves experience; but to indeed change a person, the principle must be absorbed into the very fiber or essence of an individual, reaching comprehension through mental, physical, and spiritual understanding, some might even say the soul of the individual.  Freedom is one such principle; the tool for remaining free is the ability to choose, or agency.  When applied to organizations, the same path to success must be tread, but with many individuals onboarding the principles is a challenge.  Many people believing the same way is often described as a culture (Greenwald, 2008, p 192-195), or society, and when belief turns into dedicated and repetitive action, a paradigm is created (Kuhn, 1996), also called business processes and procedures.

Agency theory is a tool for understanding how organizational cultures become cultures.  Individuals apply agency, and when many make the same choices, the creation of an organizational culture occurs.  Emirbayer & Mische (1998) expand the term agency that gives reason why Tosi (2009) and Ekanayake (2004) both classify agency theory as an “economic theory” and how agency theory “… shapes social action [p 963].”  If Emirbayer and Mische (1998) are correct, placing more emphasis upon individual agency opens doors into re-shaping controls, control mechanisms, and affects the entire organization.  The power of agency to change people, organizations, and societies is immense.  Recognizing that people will always exercise agency, guiding that agency exercise is not so much a discussion of control, but of harnessing energy and momentum to develop individuals into a cohesive whole.

Johari WindowThe Johari Window is a tool for quickly assessing a situation before making a choice.  Consider the job of a call center agent; they must be technically savvy, adept at handling multiple tasks while engaging in productive conversation, and must be able to keep a caller enthusiastically engaged in reaching a solution quickly so that the agent ay meet business set metrics and production goals.  The Johari Window is suggested as a desktop guide in promoting self-knowledge in the call center agent to improve performance.  Having personally employed the Johari Window as part of logical thinking, I explicitly recommend, that before handing an agent this tool, training must be accomplished to help allow for clearer thinking that often leads to more speedy action.  The first Johari Window represented links to a .pdf that contains additional specific information for improving training in the Johari Window principles.

Open Area

Of all the locations in the window, the open area position is where the majority of people want to stay; wherein everybody and everything knows and is known. The unknown is frightening, and change in this location comes the slowest, if at all.  Each call center agent wants to, and needs to, feel confident in what is known and where they go when they do not know; hence, training as a continual process remains the catchword in this location, even though it might not be well received.

While the location is desirable, rarely will customers call in because they already know something.  Agents in a call center should leave new hire and continual employment training and start every working day from this location where they are known and know.  The open area could also be referred to as the preparation location.

Hidden Area

The hidden area is where business in a call center will occur most effectively.  The customer knows what they want, and the call center agent knows how to deliver what is wanted and through reflective communication mutual understanding is achieved to make the hidden area become known.  Imperative to understanding in this area is the power of choice, agency, to choose to reveal only pieces of what is wanted.  If the customer chooses not to disclose what is wanted, it is not poor service when the customer’s wants are not fulfilled. This point is especially important in understanding the voice of the customer (VOC) survey results and quality call review.  The only time the agent is in the wrong, in this location, is when the agent cannot choose and thereby communicates less effectively to the customer, delivering a poor performance in need of remediation.  Both the agent and the customer have something hidden and something known.  The importance of clear communication remains pre-eminent in this location.

For instance, two top call center agents were continally competing with each other for first place evaluation. The agent who routinely came in second asked why. The answer to improving performance is found in the hidden area, opportunities that guided the agent to drop AHT/ACW and increase VOC into productive communication towards a solution.  There is power in the hidden area to capture and employ. Train agents to be alert for hidden areas to gain improved performance, not through active listening, but through reflective listening where mutual understanding between the customer and the agent is reached.

Blind Area

Of all the locations in the Johari Window, the blind area is the most dangerous for call center agents.  When the customer has information the agent does not know, the result is lost resources, productivity, and customers.  Of course, the reverse is also true.  When the agent has information about the customer and does not voluntarily devolve the information, the customer is surprised upon becoming aware and is lost because of this blind area.  Then organizational reputation damage is complete.

For example, I was working in a credit card call center and regularly saw agents not bother to bring up account issues to save AHT/VOC and other metrics.  Hence, the customer upon learning of the negative actions would call back because opportunity in the blind area was sacrificed for potential short-term gains.  Operating blind means the agent and the customer are in danger.

Unknown Area

Chinese CrisisOf all the locations in the Johari Window, the unknown area possesses the most opportunity for delivering upon a service commitment.  Consider the Chinese character for a crisis that includes danger and opportunity as equals.  The unknown always combines danger and opportunity.  Danger is risk, risk of losing a customer, risk of saying the wrong thing and insulting, etc.  Opportunity lies in making the unknown known.  In the Johari Window, when the unknown becomes known, the unknown quadrant shrinks and the known quadrant grows.  The unknown quadrant could be considered the crisis quadrant.  Good skills in mastering the unknown to thwart a crisis, eliminate danger, and win the opportunity to create a powerful customer interaction.  The unknown area is where confidence in training overlaps with the customer’s crisis to maximize opportunities for service excellence.  If there is a single shred of doubt communicated to the customer in crisis, the opportunity is lost forever because the danger was not ameliorated. The unknown has many hidden dangers to be wary, but fear is not one of them because of excellence in training.

Working as an agent in customer retention was very lucrative.  When we could probe, dig, and investigate, generally we could save a customer and generate new business.  While the company spoke about, preached around, and dictated the use of active listening, the retention department was using reflective listening to glean details and save customers through reaching mutual understanding. In the unknown area, both parties struggle with not knowing and being unknown. Therein lies the opportunity for increasing business by becoming known and learning knowledge that is not currently possessed.

While the current Johari Window reflects proportional space for each location, reality rarely allows for such clarity.  Many times, an agent’s Johari Window will look like any one of the following, none of the following, or a mixture of all:

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The key for call center leaders is to train the call center representatives to first understand themselves and then to visualize who they are in the Johari Window in each call.  The more familiar the agent is with data gleaned from knowing themselves and the business, the more power each agent will have to handle the calls more effectively and efficiently.  In teaching the Johari Window, one of the many lessons I have learned is that people do not understand and second guess their limitations.  If a person has, or considers having, a small blind area, do they know their equally important unknown or open areas.  More than likely the answer is no; why, because of the need to invest time and other resources into improving themselves and their approach to others.

When discussing the agents understanding themselves, the call center trainer, first line supervisor, and managers will employ the eleven principles of change as discussed by Luft.  The agent will need to understand the energy lost in hiding, deceiving themselves, and the problems this causes them.  Cause and effect play a significant role in visually attuning the Johari Window to daily work activities.  The call center trainer, first line supervisors, and managers will need to be able to answer clearly and effectively “why” based questions about processes and procedures, while exemplifying the Johari Window principles.  Luft’s Point No. 5point number five is critical in this process, “Interpersonal learning means a change [is taking] place so that Quadrant 1 is larger, and one or more of the other quadrants has grown smaller.”  Do we understand what this means; as leaders, we exemplify making Quadrant 1 (Open Area) larger by learning.  Leaders are teachers, teachers are leaders, but both teachers and leaders must remain loyal to learning.

Consider Gilderoy Lockhart from Harry Potter.  Gilderoy Lockhart considered himself highly capable, gifted, and talented, but reality proved his ineffectiveness and limitations.  His example opens a second issue when using the Johari Window tool in a call center:  personal perception versus reality.  Gilderoy Lockhart would see his Johari Window as thus:

Johari Window - GL 1

Reality would suggest the following might be truer:

Johari Window - GL 2

The disparity between a person’s perceived understanding and reality causes significant problems in interactions in all types of societies.  In the call center, the agent will interact with various kinds of personalities; hence, the need to train agents in this tool and to understand themselves, including their likes, dislikes, triggers, emotional hooks, and talents brought to each call.  For the best opportunities for your agents to interact successfully, training them in understanding themselves is just as important as training the agent in organizational policies, business products, services, and sales techniques.

Ongoing, regular training remains a key component to highly effective call centers and capable workforces.  Without refresher training, regular training for new products, and annual training, the capable employee gets into a rut, the rut becomes a paradigm, and the employee becomes lost to attrition and slower productivity; but most especially, lost customer interactions hamper all levels of business performance.  One employee working slow can ruin a business, and the first indicator something is wrong is the higher cost of doing business.  Win the employee through training and then treat them respectfully to reduce operational costs and increase sales through training.

In conclusion, never stop asking why, encourage learning, and never fear using the answer, “At this time, I do not know, but I will find out and report back.”  When the discovery loop is closed with the individual, everyone learns, Quadrant 1 grows, and other quadrants reduce perceptibly.  Proving once again the veracity of the axiom, “Train people well enough to leave; treat people well enough to stay; and grow together as an act of personal commitment to the team.”

References

Ekanayake, S. (2004). Agency theory, national culture, and management control systems. Journal of American Academy of Business, Cambridge, 4(1), 49-54. Retrieved from http://search.proquest.com/docview/222857814?accountid=35812

Emirbayer, M., & Mische, A. (1998). What is agency? The American Journal of Sociology, 103(4), 962-1023. Retrieved from: http://www.jstor.org/stable/2782934

Greenwald, H. P. (2008). Organizations: Management without control. Thousand Oaks, CA: Sage Publications.

Kuhn, T. S. (1996). The structure of scientific revolutions. (Third ed., Vol. VIII). Chicago, ILL: The University of Chicago Press.

Tosi, H. L. (2009), Theories of organization. Thousand Oaks, CA: Sage Publications.

© 2017 M. Dave Salisbury

All Rights Reserved

The images used herein, obtained from the public domain, this author holds no copyright to the images displayed.

 

Leading the Call Center: Flavor of the Month Philosophies

Chinese CrisisHaving just completed a project that saw me leading a team in a call center, I want to make something clear; quick fixes and flavor of the month philosophies do not work.  I cannot stress this enough; yet, the practice continues to the detriment of call center employees and the organizations served by call centers.  Flavor of the month philosophies is the latest bestseller to fix the problems in business.  We have all seen these programs including, FISH, WAIT, Strengths Quest, and so much more.  These ideas are good ideas, and they possess value, but when changed monthly, these programs, never do more than briefly mark the surface intellect of the call center.  I am not disparaging these ideas in the least; let me elaborate as to why the flavor of the month idea fails.

The project previously mentioned when concluded saw the call center director very much converted to a program of definite value in and using one’s strengths entitled Strengths Quest as presented by Clifton, Anderson, and Schreiner (2006).  The culture of strength promotes unity, and by extension, organizational power, when combined intellectually, becomes the corporate culture.  Integration in business, especially in call center operations, remains crucial to bottom-line health.  The call center director invested a lot of organizational resources to capture everyone’s strengths, publish these advantages, and use this information to measure the call center.  The problem was the staff has no idea why they are investing company time in completing the “Clifton Strength’s FinderÒ (CSF),” and many completed this assignment while taking calls and distracted.  How verifiable is the data if the attention of the person completing the task is diverted?

My assignment, as a call center supervisor, included gauging the employees in the call center about their strengths.  Of the 10-employees in the call center, two had forgotten and blatantly said they do not care.  Three expressed a desire to retake the CSF to more fully focus on the task instead of completing it between calls.  Four employees asked why and what is the purpose of taking the CSF.  Finally, all the employees, when asked how they use the CSF data in their daily actions, expressed the same answer, I do not know.

Let’s be clear; there is nothing wrong with the latest flavor of the month programs to improve an organization, provided the leaders understand change, embrace change, train and teach “the what” and “the why,” and then remain committed long after the excitement over the bright new object fades.  I had the misfortune of working in a call center where the entire corporate culture was expected to change with every fresh flavor of leadership, and the organization is a mental mess.  What is a leader to do when each new flavor-of-the-month is presented as a potential fix for organizational dilemmas?  I suggest the following as a launching point for corporate discovery and leadership support.

  • If the organization is going to invest resources in a particular program, do not change for a set period, which includes pre- and post- measurement and evaluation. If the organization does not know where they start, they can never know what happened or where to go in the future.blue-money-burning
  • Organizational change must be more than surface polish or potential money (Blue Money) is lost, never to be recovered. Organizational change needs to fundamentally affect the organization and be allowed to produce measured results.  Does this mean that if something is not working, we keep at it?  No!  It means to provide sufficient time and measurement to gauge the application and the organizational change.  Many times beta-testing the proposed change can identify the processes, procedures, and other trouble points to be mindful of, or correct in beta-testing, to ensure full organizational change may occur with a higher chance for success.
  • Get everyone involved, enthused, and a willing advocate for the change. Getting everyone involved is not producing marketing materials and desk references.  Getting everyone involved requires explaining why and detailing what in the organizational change.  Getting everyone involved means there will be feedback, pushback, and rebellion.  Expect pushback, but never allow pushback to derail reform.  Pushback is a healthy activity that provides essential opportunities for the leader to explore solutions, answer questions, and evaluate the results.
  • Teach and train; train and teach. Learning should be a constant and desirable outcome of organizational change.  Teaching is not training, training is not teaching; but, both are critical skills needed for leaders and learners.  Teaching is helping someone else acquire knowledge.  Training is teaching a behavior or ability.  Teaching is usually one-way communication using measurement tools, e.g., tests to gauge knowledge learned and retained.  Training should be two-directional communication, is completed through experience in closely monitored environments, and includes 360-degree feedback to improve the training environment.  Never allow teaching and training to become the same confused term; while the words are closely related, they are not the same action.
  • When was the last time you discussed what you are reading with front-line employees? When was the last time you engaged a front-line worker about what they are reading, thinking, and ask for suggestions to improve?  When was the last time you asked to be trained on a process, procedure, or organizational action by those who do it all day?  If recently, did you ask why, a lot?  I promise you will be surprised when you have these conversations, especially since they open up opportunities to explain and expound, learn, change, adapt, and engage with those you lead.
  • Organizational change requires enthusiasm from all parties to begin to engage and deepen the shift from surface polish to fundamental culture adaptation. Enthusiasm takes many shapes, sizes, and colors, including the loyal opposition of followers, opinions, and feedback.  The leader must exemplify and honor, or support, the enthusiasm around them as a tool for succeeding in changing the organization.
  • Clarify intentions. Clarify processes.  Clarify procedures.  Clarify by asking follow-up questions and reflectively listen to obtain mutual understanding.  Clarification remains one of the most critical tasks in organizational change.  When confusion rears its ugly head, respond with explanation and follow-up, as detailed in two-directional communication.  When the comprehension is doubted, ask for feedback as an opportunity to increase clarification.  Clarification is both a tool and an opportunity; do not waste this opportunity and tool by neglecting those needing clarification.
  • Organizational change needs a mechanism for gathering data from many sources, including the employees affected, the vendors, the suppliers, and the customers. Open the valve for data to flow back.  One of the most horrific organizational changes it has been my displeasure to witness was increased because the leaders operated in a vacuum and never allowed data flow that was contradictory to the previously agreed upon results.  The leaders in this organization worked hard to refuse hard data, which contradicted their bias, and this ruined the business, the employees, and the customers.

I cannot guarantee following all these points will make organizational change succeed, roses bloom, bottom lines inflate, rainbows dance, and all of life fall into organized lines leading ever upward.  I can guarantee that without these points, organizational change that promotes an environment of learning will never be more than polish.  Consider the axiom, “Lipstick on a pig.”  The lipstick is not bad, the pig is not bad, but placing lipstick on a pig is out of place and does nothing to improve the pig.  Flavor-of-the-month changes are lipstick on a pig, not bad, but out of place until the entire organization is on board and enthusiastically supporting the move, and proper measurements are in place to gauge, measure, and report the change.

Business theorist Chris Argyris put forth a model, later discussed by Senge (1994) explaining our thinking process as we interact with the world.  This seven-step method is called the Ladder of Inference; according to this model, as we move up the ladder our beliefs affect what we infer about what we observe and therefore become part of how we experience our interaction with other people.  Organizational change can be plotted along the same model or ladder of inference.

Leadership LadderOrganizational change begins with information output; then collect data, preferably through listening and observation while doing the work; interpreting the data includes obtaining data, evaluating meaning, deciphering intent, and understanding value.  Please note, the assumptions should not be made in a vacuum and could be wrong; thus, always return to the data producers and ask questions to ensure mutual understanding.  Once conclusions are mutually understood, they become beliefs; but, don’t stop until beliefs become actions.

If a model is needed, please benchmark Quicken Loans and Southwest Airlines, both organizations are doing a tremendous job with the ladder steps, especially moving organizational beliefs into motivated organizational action.  Remember, one does not climb a ladder to view the horizon and scenery, they climb a ladder to begin working, carrying the tools needed to perform the work, and possessing certain knowledge that the work can be accomplished.  Climb the ladder of success with the intent to work, achieve, and move forward.

References

Clifton, D. O., Anderson “Chip,” E., & Schreiner, L. A. (2016). Strengths quest: Discover and develop your strengths in academics, career, and beyond (2nd ed.).

Senge. P. M. (1994). The Fifth Discipline: The Art and Practice of the Learning Organization. New York: Currency Doubleday.

© 2017 M. Dave Salisbury

All Rights Reserved

The images used herein were obtained in the public domain, this author holds no copyright to the images displayed.

A Leadership Statement – Shifting the Political Paradigm for a Better America

As a leader, three basic principles drive leadership:  freedom, agency, and learning (Robinson, 1999; Rao, 2013; Tucker, 2001; and Ulrich, 2008).  Three inviolate laws are also present, these inviolate laws are: respect, engagement, and preparation; these laws are guided by the principles of freedom, agency, and learning.  Hand-in-hand, these three principles of leadership and the three inviolate laws govern society.  Image - MSM HandledWe are learning by sad experience that many, especially on college campuses and in professional sports arenas, consider respect to be a one-direction demand, where accountability is not enforced and where the hooligans and terrorists of thought, demand and punctuate their demands with violence. A person, who tries to curtail the thoughts of others with physical, verbal, or emotional abuse, has crossed the line into thought terrorism, and their voice is reduced to nothing, even though mainstream media (MSM) outlets provide these people a soapbox to reach a larger audience.  A person, who demands respect to flow to them and refuses to give respect to others, is abusing verbally and emotionally those they refuse to respect.

Leaders, who embrace the freedoms of their followers, allow them full possession of their individual freedoms, encourage them to employ individual agency, and allow them to be guided by a thirst for learning (Broskowski, 1984; Ekanayake, 2004; and Hoppe, 2006).  Image - John Wayne QuoteThe engaged learner prepares fully in a constant cycle of learn and teach and needs to be supported in this cycle in order to remain a learner preparing to teach and a teacher preparing to learn.  The leader has responsibility for teaching correct principles and embracing the need for the learner to govern himself or herself.  Thoughts and beliefs, opinions, and personal preferences cannot and should not be litigated, forced, or coerced.  Those, who choose to act in a manner not conducive to a quiet and orderly discussion, diminish themselves, harm themselves, and place themselves outside civilization, like the rabid dogs of the west.  The proper response by civilization for those placing themselves in this category, rabid dogs or wolves, remains the same:  permanent separation and removal.

The successful leader is morally obligated to embrace loyal opposition found in those being led and to take and give counsel and guidance to improve plans, implement ideas, and garner the individual buy-in from free agents ensuring integrity, responsibility, and accountability are not lost or forgotten.  The leader is a teacher and a teacher is a leader.  The cycle for learning and teaching does not become lost or less significant as rank is increased.  The inverse occurs. The greater the rank the higher the responsibility to remain engaged in the learning/teaching cycle (Kumle and Kelly, 2006; Maehr and Braskamp, 1986; Nibley, 1987).

Imperative to those with greater authority are the requirements to oversee those to whom authority has been delegated.  Image - Quote Poltics is DirtyWhen those possessing delegated authority use that authority to denigrate, deride, and destroy, that authority needs to be publically stripped, and the individual forced to make amends concurrent with the laws of the land and the expectations of society.  We have come to a point in the laws of America where those with money and powerful political connections (Anthony Weiner) can receive pitiful punishments for dangerous crimes, and those without powerful political friends and money receive far harsher sentences for crimes committed, where standard sentence guidelines include some portion of all of the following: 5-10 years in prison, registering as a sex offender, and fines starting at $50,000 (Lorang, McNiel, & Binder, 2016).

Consider the IRS Scandal, the VA Scandals, and the continuing news cycles where politicians make promises and renege on those promises before the ink is dry on the election result forms.  The staffs to whom authority has been delegated are being allowed to run rampant, and those selected to be leaders are doing nothing to curtail the abuse of power being inflicted upon the population (Perez, 2015).

America, President Trump is a leader, whereas many of the House and Senate are less than the poorest managers ever vested with delegated authority.  Consider Senators McCain, Feingold, and Collins, where Obamacare is concerned, they campaigned on repealing Obamacare, and they continue to actively thwart the legislative process for personal gain (Prokop, 2015).  Leaders, regardless of their field of endeavor and political environment, act, work, and their actions are logically tied to their work.  While one might disagree with the actions based upon personal opinion, the actions taken signify their leadership.  Managers, do not act, are not tied to their actions, and never are held accountable; whereas, the leader and their actions are inseparable.  Hence, while McCain, Feingold, and Collins, among others, will thwart the needs of America for personal gain, Trump will be held accountable for their inaction.  Image - Terrorism DefinedThe same is true for the inaction and legal quandary Obama created at the IRS and the VA, managers performed tasks that were incongruent with the law, were not held accountable, thus the president remains culpable.

Consider how many times “deals” have to be made just to get common sense, helpful, and proper legislation out of committee and in front of the current sitting president.  In real life, “deals” would be considered bribery, collusion, inducements, kickbacks, and blackmail; yet, the citizens accept these legislative maneuvers in the hopes of improving America through legislation.  We are told as children that politics is a dirty business; it has become a dirty business, because those in power and those with delegated power have refused to honor, sustain, and support the laws of the land, the expectations of the citizens they purport to represent, and the illegal use of tax money to conduct these bribes is reprehensible at best.

Currently, the solution remains in the hands of the voters re: stop electing the same old names over and over again.  Why have Senators McCain and Collins become so powerful; tenure in the Senate, McCain since 1981 to present and Murkowski since 2002, and Collins since 1996, they have been living off the public taxpayer for too long!  I am not advocating term limits.  I am advocating an informed and motivated electorate willing to be the leaders they wish to see in office, and holding those in power accountable for the power that has been delegated from “We the People” to those who temporarily hold elected office.  I am advocating for voters to make the election box more important than the TV box, the cubicle box, or the social media box.

I am advocating for the return of a highly charged and logically powered electorate to take back the reins of power from those currently in office, especially those who have continually proven they cannot handle our authority.  For example, Senator Collins has continually proven a weak link by taking positions anathema to her voters, but lacking a viable alternative, her voters return her to power every six-years.  In fact, having lived in her district, I know for a fact there are many of her voters who despise Senator Collins, and hold their nose and vote for her anyway.  Having lived in Senator McCain’s district, the same is said of him when voting every six years, no viable alternative, send the same old name back to power.

Much noise has been made about professional sports players and the refusal to stand for the Anthem and the American Flag.  Under the three principles of leadership and the three inviolate laws, these players do not deserve the jobs they hold, let alone a position of respect.  The reason is simple.  The flag covers all.  Standing for the flag means respect for all, honor for all, and will, regardless of the other person, stand for America as the last bastion of liberty, freedom, and a republican form of government.  The liberties demanded to allow you to sit are the same liberties you are rejecting every time you sit for the anthem and flag ceremony.  All kneeling sports players and flag burners should answer this question: “When you are in trouble, do you want American police, firefighters, EMT’s, and or the American Military personnel to help you?”  If so, why would you contemplate sitting when standing for the flag symbolizes you will help others and sitting proclaims you will not help others.  Since you will not help others, as signified by burning the flag and kneeling or sitting out the national anthem, where should help come from?

I cannot stress enough leadership is needed. Image - Eagle & Flag Leadership begins with those who selected their leaders demanding an accounting for the authority delegated to them.  Use the principles of leadership mentioned and the inviolate laws to correct yourself, your family, and then demand from society the same.  When we do this as a nation standing for liberty, we will succeed, and those naysayers and whiffle-whafflers will be held in eternal contempt because of their actions against us, the citizens of this Republic, the United States of America!

 

© 2017 M. Dave Salisbury

All Rights Reserved

The images used herein were obtained in the public domain, this author holds no copyright to the images displayed.

 

 

 

References

Broskowski, A. (1984). Organizational controls and leadership. Professional Psychology: Research and Practice, 15(5), 645-663. doi: http://dx.doi.org/10.1037/0735-7028.15.5.645

Dandira, M. (2012). Dysfunctional leadership: Organizational cancer. Business Strategy Series, 13(4), 187-192. doi: http://dx.doi.org/10.1108/17515631211246267

Ekanayake, S. (2004). Agency theory, national culture and management control systems. Journal of American Academy of Business, Cambridge, 4(1), 49-54. Retrieved from http://search.proquest.com/docview/222857814?accountid=35812

Hoppe, M. (2006). Active listening improves your ability to listen and lead. Greensboro, N.C.: Center for Creative Leadership.

Kumle, J., & Kelly, N. J. (2006). Leadership vs. management. SuperVision, 67(8), 11-13. Retrieved from http://search.proquest.com/docview/195598300?accountid=458

Lorang, M. R., McNiel, D. E., & Binder, R. L. (2016). Minors and sexting: Legal implications. Journal of the American Academy of Psychiatry and the Law, 44(1), 73-81.

Maehr, M. L. and Braskamp, L. A. (1986) The motivation factor: A theory of personal investment. Lexington Press, Lexington, MA.

Nibley, H. (1987). Management vs. leadership. Executive Excellence, 4(12), 9. Retrieved from http://search.proquest.com/docview/204630361?accountid=458

Perez, E. (2015, October 23). First on CNN: DOJ closes IRS investigation with no charges. CNN – Politics. Retrieved from http://www.cnn.com/2015/10/23/politics/lois-lerner-no-charges-doj-tea-party/index.html

Prokop, A. (2015, September 25). The GOP can’t quit Obamacare repeal because of their donors. VOX. Retrieved from https://www.vox.com/policy-and-politics/2017/9/25/16339336/graham-cassidy-republican-donors

Rao, M. S. (2013). Soft leadership: a new direction to leadership. Industrial and Commercial Training, 45(3), 143-149. doi: 10.1108/00197851311320559

Robinson, G. (1999). Leadership vs management. The British Journal of Administrative Management, 20-21. Retrieved from http://search.proquest.com/docview/224620071?accountid=458

Tucker, R. (2001). Innovation: The new core competency. Strategy & Leadership, 29(1), 11-14.

Ulrich, D., Smallwood, N., & Sweetman, K. (2008). The leadership code: Five rules to lead by. Boston, MA: Harvard Business Review Press.

 

An Open Letter to Trader Joe’s – Shifting the Paradigm on the Grocery Purchasing Experience

Image result for images, trader joe'sHello Trader Joe’s,

I want to thank you for an amazing shopping experience.  I have loved entering your stores across America, from Portland, Maine to Seattle, Washington, from Phoenix, Arizona, to Spokane, Washington.  I have enjoyed every location we have traveled.  I am so thrilled to buy products that are original, cleverly packaged, and where humor is a tool for improving food.  For example, during the last trip, I saw the packaging on the white potatoes relating how they (the potatoes) like hot places, cream, and much more.  The humor employed takes buying potatoes to a new, higher level as well as bringing a laugh and several smiles to the customers.

No other chain store in America pays so much attention to the customer experience.  Thank you for hiring amazing store associates!  I have never walked into a Trader Joe’s and had a bad customer experience.  Of all these years shopping at Trader Joe’s, only once have I had to return an item, and the return was done pleasantly and effortlessly.  I have had questions about products, and all the customer interactions regarding these questions were enjoyable and often entertaining.  Best of all, when I have had questions about products to buy, the crew members have had no problem offering a taste or supplying recipe information.  The freedom to meet the customer’s desires in a fun, friendly, and fresh manner makes an excellent shopping experience from coast-to-coast.

In fact, one of the most desirable things about shopping at Trader Joe’s is interacting with the crew members and the other customers in discussing recipes, flavors, and getting new ideas.  In fact, when I have had more information about a product than an crew member, the crew member has been gracious and thanked me for the helping hand.  Always, the customer experience promotes a desire to return and keep investigating for new opportunities to eat well.

I was having a rough day this past Wednesday (09/13/2017).  I went to Trader Joe’s for a quick stop and my mood began to lift.  Watching the little kids pushing the “Shopper in Training” carts, watching the kids get excited about food, and experiencing the Trader Joe’s difference was exactly what I needed.  Best of all, I saw raisin/cinnamon bread and mango chutney, and I was going to have toast upon my return home, one of my favorite comfort foods.  I cannot relate satisfactorily how much enthusiasm and smiles the customers show upon entrance at Trader Joe’s.  No other store sees this type of customer interaction, and I am grateful to you for fostering this environment for it helps other customers to enjoy the shopping experience, as well as improving the crew member’s day.

Related imageThank you for the murals on the walls, the interesting posters, the flowers, plants, cards, and new hidden treats to explore every trip.  I enjoy immensely the ginger granola, the dark chocolate crepes, the triple ginger cookies, and the list goes on.  I was in Trader Joe’s off Louisiana Street in Albuquerque today (09/18/2017) and tried “Trader Ming’s” products, a great gustatory and amusing experience.  Several times in my shopping history I have tried to taste every item, except the alcohol products, in a single Trader Joe’s store.  Never happened to date, but I have enjoyed the journey and the adventure where food and shopping meet.

I have to say, as Trader Joe’s is the sole provider of pretzel rolls in my area, I am always looking for new recipes for using pretzel rolls.  My love of all things pretzels continues to be a fun distraction and gustatory journey.  For example, two-weeks ago I bought six pretzel rolls and tried three different recipes, roast beef with sharp cheddar on a pretzel roll with some black pepper/olive oil mayonaise, which was absolutely amazing; fried egg with bacon on a pretzel roll was a great delight, your crew member suggested a coarse mustard that totally made this meal; and the coupe de resistance continues to be the pulled pork/chicken/beef on pretzel rolls with any flavor of cheese.  Hot or cold, these sandwiches make eating a new adventure.

My wife is vegetarian/vegan and appreciates having a variety of choices in her meal planning that she cannot find elsewhere from the tiny, tiny Brussels sprouts, the mini sweet potatoes and mini avocadoes, the beautiful, fresh, ripe, sweet fruit that you don’t have to wait to ripen, to coconut milk frozen desserts.  She loves the seasonal specialties, the beautiful murals and fun decor, the pleasing scents of flowers, the tidiness and cleanliness of the store, the wide aisles, and the people, the wonderful people, both customers and crew members, people who smile and laugh and share what they know and have experienced in their adventures with food in polite, kind, and fun ways.  She says it’s a little bit of heaven on earth.

I know when I see the Trader Joe’s sign, good food, good shopping, and good people are available and ready.  Thank you for more than two decades of wonderful food and people experiences.  Wherever the road has taken us, Trader Joe’s continues to follow, and it is very much appreciated.  In Ohio, I regularly traveled more than three-hours from northeast Ohio to Columbus for Trader Joe’s, a trip I was glad to make!

From a very satisfied customer, thank you!

Dave Salisbury

© 2017 M. Dave Salisbury

All Rights Reserved

 

Understanding Money: Shifting the Paradigm on Money

Several years ago, I spent a significant amount of time trying to explain the different types of money to a very inexperienced young man.  I was highly unsuccessful; so, I take this opportunity to explain various types of money and how they work in the scheme of things.  I hope this explanation helps others to not only understand their own money, but also to become more cognizant of how governments spend your tax money.

Green money is cash.  Green money is the dollars and cents in a bank account or your pocket and is easily spent.  Image result for images, green moneyGreen money is often called liquid money or liquid assets, liquid because the holder is presumed the owner, who is in possession of it and who can spend it freely any way he wishes.  Possession is nine-tenths of the law.  One of the first lessons most of us learned growing up was if you wanted to buy something and your pocket was empty you went without.  Liquid assets are cash, green money, and are available to be spent in any way the holder chooses.

Non-liquid assets are consideImage result for images, house, car, boatred green money as a result of their sale; this is why a house, a car, a boat, and other such items are considered assets.  The sale of the asset provides the opportunity to turn a non-liquid asset into a liquid asset.  However, since many times the asset is employed as collateral for a loan, the sale of that asset means the loan holder is paid first from the sale.  If the resale value is insufficient to cover the full loan owed, the loan, which is red money, can still be collected; this process is why red money is so important to understand.

Red money is debt.  Red money always comes with a penalty called interest.  Interest is green money turned red to return the profit to those who lent the initial funds or principle.  That debt, be it a loan, a credit card, or other debt model, remainImage result for images, red debt traps a burden to the borrower, continues to accumulate interest, and can be called due at any moment in time.  While some laws protect the borrower from excessive interest rates, it remains important to know about and be cognizant of the interest rate trap.

The interest rate trap comes in several forms.  While in the US Navy, stationed in Norfolk, Virginia, a sailor buddy bought a beautiful car for $4000 with a 45% interest rate.  He put $1500 in green money down, so the full loan amount, principle and interest, for 60-months was $7805.49, including the sales tax.  When the car was stolen, later that month, the insurance company valued the car at only $1000, leaving the sailor to pay immediately $6805.49.  This is one type of interest rate trap; another comes from Payday Loans.  Borrow your next paycheck today, get the money today, and pay your paycheck back during the next 36-months at an interest rate between 30-60%.  By the time the payday loan is paid off, more than four separate paychecks to cover a single paycheck loan will have been invested provided payments have been made on time and as quickly as possible.

While paying off this loan, you lose your job.  You can lose your car as well because your car is sometimes used to insure your payday loan.  If the resale value is insufficient, you lose your car, you lost your job, and now you still owe a considerable sum that gains interest.  Red money is dangerous; like the sword of Damocles, the danger hangs by a tiny thread above the borrower; one wrong move and the sword falls.  Debt, red money, can be helpful; but, careful planning and budgeting are required before entering into debt obligations.  Always it is better to save and budget green money, or obtain investors, before contemplating debt.

Black money is dead Image result for images, black moneymoney.  Consider the person who takes green money and places those dollars and cents under a mattress or in a coffee can in their home.  The cash is out of circulation, is not valuable enough to collect, and no one is benefiting from the money through interest.  Black money can be created in other ways that will be explored later in this article.

The next type of money is blue money, also referred to as potential money.  Consider a hammer. The hammer might cost $20.00 in green money to buy and bring home.  In the hands of a trained construction worker, a $20.00 hammer, over the course of the hammer’s effective working life, has the potential to earn thousands of dollars in green money for the construction worker.  Image result for images, blue dollarsIn the hands of an inexperienced worker, the hammer has the potential to cost thousands of dollars in green money.  Training a person to improve their performance might cost $300 in green money; but, if that employee is able to improve his performance on the job, potentially millions of dollars are able to come into the company because of the training.

Money is created when it is borrowed and interest is paid on the loan.  For example, Jack has an extra $500 (green money).  He gives this money to his friend Joe in the form of a loan (red money).  Joe takes the loan, adds to his business potential (blue money), and through increased profits is able to pay Jack his $500 loan plus the interest of $300.  Hence, $300 (green money) is created as profits for Jack.  While a simple analogy, understanding money should be simple.

Joe’s loan to Jack showed on Joe’s books as red money until the loan and interest were paid.  During this time, Joe was also making green money, or profits sufficient to pay his workforce, his other obligations, and still retain sufficient to pay himself.  Small business owners are not paid until everyone else is paid, and it is not uncommon for small business owners to be scraping by on the smallest margins because all their non-liquid assets are locked up in loans to keep the business afloat.  When poor business practices begin risking inventory and equipment and shareholder investments are added into the equation, is it any wonder why small businesses struggle.

Money is also created when saved in the various saving tools offered by banks.  The diligent saver can save $40 a week until he or she is 65 years of age and potentially have millions in the bank for retirement.  Why, because the bank will pay interest to the saver from the interest collected on the loans the bank makes with the green money invested.  Many different savings tools can be considered as non-liquid assets because of the agreements made between the saver and the bank.  Generally, the longer the agreement for the bank to hold the money, the higher the interest rate paid as the bank can schedule payments and loan the same dollars more easily when the money of the saver is scheduled to be in the bank for a longer period of time.

Often Federal treasury departments of governments create money by printing more or larger bills.  The problem with printing more money is one of surplus, which begins to increase interest rates and decrease value.  Consider for a moment, if the only way to create money is to work money through lending, improving business, etc., then printing only makes harder putting money to work.  Too much money on the market creates negatives; negatives include lower dollar value, which makes items cost more, and increased interest rates, which makes borrowing costs increase.  More importantly, except for necessities, the willingness of producers to spend money stops.  These are normal cause and effect actions.  A long enough period of decreased willingness to spend money and an economic downturn is initiated.

State, City, County, Town, municipal governments are even more pernicious with their plots and plans.  On the local government level, money cannot be printed; hence, debt is entered into and municipal bonds are sold to create money in the private sector, which is then paid to the government in increased taxes, but the money lent to the local government was already spent.  One truth discovered about government, when taxes are increased, money is asked of the voters to borrow.  The truth is, the government body asking for more has already spent the increase, spent the budget, and usually spent twice as much as they are asking the voters to allocate.  Consider special elections for increasing taxes, the money being asked for has been spent, the budget was spent, and now the voters are asked to pay for the cost of the special election.  Many times, the increase being asked for has been spent three to four times before the election is even considered.

Poor fiscal planning increases debt by decreasing the value of the original municipal bonds, and the government has to borrow more to get relatively close to the value of the first municipal bond sold.  Note, municipal bonds are considered as debt to the local government and as green money non-liquid assets to the purchaser; municipal bonds are able to be bought and sold on the private market.  Government focuses upon the holder of the most bonds; because elected leaders are focused upon the holders of the most bonds, citizens bear no weight in being heard.  Money talks!

Municipal bonds, in several different locales, can be held as unseen debt, or black money kept on other books, not currently open to the public.  The monies owed are not considered red money, because there is no plan by those in power to pay these debts; thus, the amount of a city’s debt could be significantly higher than reported.  This is called an unfunded liability.  Unfunded liabilities never have a plan for repayment by those in power.  Unfunded liabilities can be a mixture of a lot of different debts (employee retirement, some municipal bond types, unpaid bills to local service providers, etc.), but the common denominator remains.  No plan is in place to meet that obligation and no budget item covers these debts; thus, black money increases.  Unfunded liabilities are hopes of current politicians on future prosperity, and sometimes, depending upon laws, unfunded liabilities are part of the government’s credit rating. Whether it is, the debt does not go anywhere, might or might not accrue interest, and always is hidden from the taxpayer, who is responsible for paying the bills.

While this explanation is very basic, the lessons contained are sufficient to protect the Image result for images, blue dollarsbottom-line, improve knowledge, and provide opportunity for improving circumstances.  Some key ending points when bottom lines are failing include:  before anything else, look to lost blue money as the cause.  The more blue money is disregarded is exponentially equal to red money increases, and green money evaporation; this formula is set in stone.  Potential blue money is not elusive, but it takes keen observation to protect and grow.  Grow enough blue money and green money multiplies exponentially.

© 2017 M. Dave Salisbury

All Rights Reserved