Yes, that Roto-Rooter! (I promise, this relates to hiring)

Recently, I had this company fix a clogged sewer line. Luckily, the problem was small, but the repair people reminded me of a valuable lesson.

While their machine was working, I asked the two Roto Rooter employees: “So, how long have you worked for the company?” Their answer floored me. One of the remote employees had worked for them for 18 years, and the other for 12. They were intelligent, professional, and capable individuals who had spent years making their living unclogging drains.

Most people would not want their jobs. Yet, these two men were proud to be working for their company. I asked: “What makes this company so special?” During our conversation over the next 10 – 15 minutes, this is what I learned:

• The General Manager is honest, capable, employee focused and fair.
• The company gives them the tools and the training they need to be successful.
• The company communicates effectively and includes them in the company functions.
• The pay and benefits are good.
• The company keeps their service vans and equipment in good shape.
• The company cares about them and respects their efforts.

I called the General Manager to congratulate him for having a work environment that the remote employees were proud of. We talked for several minutes and then, I asked, “where do you get your new employees?” Without hesitation he said: “Almost 100% are referrals from our current employees.”

Unclogging drains is a dirty, smelly job with long hours and difficult weather situations. But Roto-Rooter in St Louis retains good people because they focus on doing the right things. They treat their employees with respect. The net result – a growing, profitable company with low turnover, an engaged workforce and good customer service.

Today’s employees are saying: “Validate me as a person or lose me as an employee.” Do you have a turnover problem?

When employers and investors speak up, lawmakers pay attention.

The Responsible Business Initiative for Justice (RBIJ) was founded in 2017, and since then, this award-winning nonprofit has partnered with hundreds of companies across the world to advance fairness and equality in systems of punishment and incarceration. By engaging businesses to use their voices, resources, and working practices, the organization has worked to change criminal justice narratives, support legislation, and create real opportunities for deserving individuals.

Founder and CEO Celia Ouellette spent a decade practicing as a defense attorney, primarily on capital cases across the United States. As a lawyer, she found herself constantly fighting a criminal justice system that was cruel, expensive, racist, and broken. Despite working to save people from execution, she could only help individuals one at a time. “It’s not enough to save people one by one.” She often reminds conference audiences. “We must look to prevention, not just cure. We have to change the system, and prevent individuals from becoming trapped in the first place.”

When it came to delivering systemic change, Ouellette recognized that businesses could make a difference. No constituency is as important to lawmakers, and it was clear that business support would be decisive in driving policy campaigns over the line. So RBIJ was set up to rally and strategically deploy that support.

Across the United States, there is an established and growing need for companies to speak out. Six in ten Americans feel that it’s no longer acceptable for companies to remain silent on social issues. The same number says they will reward businesses that actively address these issues. The past two years have been a reckoning for the American justice system, and its flaws are now recognized as some of the most glaring social problems facing the United States today.

An excellent example is Business Leaders Against the Death Penalty, which RBIJ launched at the South by Southwest Festival in 2021. Spearheaded by Virgin Group founder Sir Richard Branson, the campaign brought together more than 250 international business leaders to back an end to capital punishment around the globe. Supporters include Meta COO Sheryl Sandberg, Salesforce CEO Marc Benioff, Unilever CEO Alan Jope, and author and entrepreneur Arianna Huffington. Their support has already been deployed in campaigns from Utah to Singapore through op-eds, interviews, joint statements, and private advocacy. In addition, the campaign has been covered by over 250 media outlets in more than 10 countries. By amplifying business support for change, we have helped shift narratives around criminal justice issues and given campaigners invaluable ammunition for advancing reform.

We’ve also convinced businesses that criminal justice reform isn’t just a moral imperative for companies – it’s an economic one. Take The Clean Slate Initiative as another example; it closes certain types of criminal records after a specific time. The group’s motto is: A criminal record shouldn’t be a life sentence to poverty. The United States loses more than $80 billion each year from the underemployment of people with criminal records. One in three American adults now has a record and faces substantial and often wholly unnecessary work, education, and housing barriers. Removing these restrictions for deserving individuals who have done their time will automatically allow employers access to a vast, diverse, underutilized talent pool. With over 11 million vacant jobs to fill in the Great Resignation, it’s a strategy that could benefit businesses greatly.

This demonstrates another critical aspect of criminal justice reform — marshaling key business voices to support specific local policy campaigns. Last year, for example, RBIJ brought together companies to help end juvenile life-without-parole sentencing in Ohio. It was an essential step forward; no other country sentences children to die in prison. We worked closely with state campaign partners to end this cruel practice.

We also work with employers to create change within their operations, most notably through hiring. In March 2022, again at South by Southwest, we launched Unlock Potential with the support of the Walmart.org Center for Racial Equity. The program is a groundbreaking intentional employment initiative to keep young people away from encounters with the justice system. By providing meaningful, long-term career opportunities for individuals aged 16 to 24 (who are most at risk), Unlock Potential aims to break cycles of poverty and incarceration while at the same time advancing economic mobility and racial equity.

Our work at RBIJ has never been more critical. While the United States makes up just 4% of the global population, it accounts for 21% of its prisoners. The country’s justice system is rightly decried as inefficient, wasteful, cruel, and racist. Internationally, lack of access to stable and accountable justice systems remains “a great threat to sustainable development,” according to the United Nations. There is an existential need for corporations to “walk their talk” on issues like systemic racism and embrace their responsibility as a force for good. We work with them to do precisely that.

An enormous amount of food goes to waste in the US and around the world while millions of people suffer food insecurity. The impact of food waste also has serious ramifications for the environment and on businesses’ sustainability goals and profitability, posing unprecedented challenges.

In a recent landmark report titled Overcoming the Food Waste Challenge: Improving Profit While Doing Good, Coresight Research focused on food waste occurring at grocery retailers. The report provides key data and details on an industry-wide mission to eliminate food waste that paints a portrait of sustainability leadership. Coresight is a respected source of retail industry data with a mission to accelerate innovation and growth. According to the report, not only does edible food waste reduce grocery retailers’ profitability, but it negatively impacts the environment, occupying space in landfills and generating carbon and greenhouse gas emissions.

The Coresight Report draws a clear line in the sand for the food industry: “Disposing of huge amounts of edible food in landfills seems irresponsible and shameful in a time when there is massive food insecurity in the US and around the world, which has likely increased during the pandemic.” The report declared that getting a better handle on food waste would enable grocery retailers to ‘do good by doing well’—i.e., meeting commitments around sustainability and social responsibility while also improving profitability.  However, much of this waste can be avoided through the use of technology.

Technology exists to address overproduction and overordering, which are the main causes of food waste, according to survey respondents. This could be mitigated with more accurate forecasting and AI-driven demand forecasting/planning is in fact, the top area for planned future investment. Specifically, software platforms like atma.io connected product cloud use artificial intelligence and machine learning to analyze and alert on anomalies and inefficiencies across the supply chain; helping mitigate the risks, including minimizing spoilage, reducing loss, waste, and greenhouse gas emissions, and in turn maximize sales.

Data Drives Action

Food waste has wide-ranging economic, social, and environmental consequences on a global basis. The United Nations’ Environment Programme estimated that global food waste amounted to 931 million tons in 2021, and a 2011 study (latest available data) by the UN Food and Agriculture Organization estimated that food waste caused a $750 billion economic impact (excluding fish and seafood) and generating 3.3 billion metric tons of CO2e (carbon dioxide equivalents) into the air, and the current figure is likely much higher. 

Collecting and getting command of relevant data is a critical precondition for demand forecasting and inventory management. Similar to the quote, “You can’t manage what you can’t measure,” attributed to Peter Drucker, collecting data on items, their location, their state, and inside the store is the essential first step. 

Two points stand out in the Coresight survey:

• Enormous loss of revenue-30% of food in U.S. grocery is thrown away, amounting to $21 billion in net income annually

• Additional economic, societal, and environmental costs – the disposal of waste incurs costs and generates carbon emissions; an estimated 50 million Americans will face food insecurity this year

Leading by Example

Food waste has clearly emerged as a key element for sustainability in grocery retail: 90% of respondents in this Coresight survey said reducing food waste is important for reaching their sustainability goals and 72% have set sustainability goals specific to food waste. 

Several large US grocers have publicly released their goals for reducing food waste. The Coresight report presented notable examples of corporate leadership below.

• Albertsons committed in 2019 to reduce food waste by 50% in its Pacific Coast divisions by 2030. The company also donates edible fresh and packaged food products that are close to the “use by” date to local food banks. 
• Kroger’s “Zero Hunger | Zero Waste” program aims to end hunger in the communities it operates and end food waste by 2025 through innovation, increasing food donation, increasing nutrition, and advocating for changes in public policy to address hunger and divert food from landfills. 
• Walmart has set a goal to eliminate food waste in the US, Canada, Japan, and the UK by 2025 as part of its general goal of moving to zero waste in the US and Canada by the same year.

Technology Leadership Responds

Food retailers are addressing the urgency of food waste by adopting available technologies to solve this escalating issue. These technologies include AI-based demand forecasting, RFID and Blockchain to manage inventory and capitalize on the opportunity to improve profits while reducing the costly disposal of edible food into landfills.

In fact, according to the Coresight survey, 84% of grocery retailers plan to invest in technologies over the next two years to manage food waste. The overwhelming consensus among technologists is that digital solutions create efficiencies while driving sustainability.

Accurate data also enables operators to quickly sell items that are nearing their expiry instead of having to discard them. Utilizing this data, they can establish an inventory system that forecasts and tracks food product usage so that it can be offered to customers safely, and not end up as waste. 

The call for global sustainability solutions will continue to get even louder. Solving the food-waste problem will likely take a combination of technology, government support. It will also benefit from pressure exerted by investors or environmental activists that holds grocery retailers accountable to their sustainability goals. Leaders across the retail industry can learn from the example being set by its food sector. 

You can access the full Coresight research report here.

Numbers are obviously important when it comes to the growth and longevity of any business. It’s the default method to measure success, and it’s tempting to make it the only way to measure success. It’s easy to conclude that your business is good if the numbers are good. However, that might be a critical mistake.

Your customers are the most important part of your business’s growth and longevity. You can’t be successful without them! Your customers don’t necessarily care about your numbers. Beyond some basic confidence that your company will be around for a while, your customers probably don’t care about your revenues or profitability. What they do care about is how your business engages with them individually.

Executives, perhaps harnessing the constant emphasis from their MBA program, love to search for the next new thing, a new hack, or a cutting-edge way to increase profits. Being clever is great, but the foundation of your business is, and always has been, your customers. How you treat customers, or at least how they perceive they’re being treated, can be the difference between corporate success or failure, especially in today’s world with online reviews and social media.

It is imperative to remember to step into your customer’s shoes and see things from their perspective now and then. That perspective and a commitment to establishing tower relationships deep-rooted cus will determine your success more than anything else. 

Below are some tips for providing first-rate customer service that will set you apart from the competition.

It’s All About Respect

Southwest Airlines President Emeritus Colleen Barrett once said, “To earn respect (and eventually love) of your customers, you first have to respect those customers.”

Short and sweet, but this sentence packs a lot of power. Customers can sense a lack of respect even by the tone of someone’s voice, so it’s vital that your employees are intentional and composed in every conversation, by phone, email, or text. 

Remind your employees to think about how they would want to be treated if they were the customer. Forty percent of people report a willingness to stop doing business with a company because of poor customer service, especially when they feel the company regards them with indifference. 

Keep Your Word

It’s pretty evident that people are only comfortable doing repeat business with companies they like and trust. The fastest way to damage your reputation is to become known as a company that’s not forthcoming with its customers. 

Are there surprise charges on your invoices that weren’t explained to your customers up front? Are you delivering when and how you committed?  

When you deliver on your word you build trust with your customers. Each time you come through for any of your customers you lay down a brick in the building of a reputable business. 

Actionable Solutions… Never Blame

It’s impossible to be perfect, and customers don’t expect you to be. Instead, what they look for is companies that own up to their mistakes, are apologetic about miscommunications, and are eager to learn from mistakes. Providing solutions to ensure mistakes aren’t repeated is often all that is required. 

It has to be said that you should never blame your customers for a failed outcome. Every part of the customer journey, from the time they browse your products or services until the time they are delivered, is, ultimately, your responsibility.

Evaluate Your Company Culture

Do your company culture and values place proper emphasis on customer care? Have you hired the right employees to interface with your customers? Do your employees have the right training? Have they developed sufficient empathy to treat customers with kindness and respect? 

All successful business is built on relationships. For your company to thrive, be sure to treat customers like humans and not just numbers.

The monumental battle over remote work is heating up this summer as more traditionalist business leaders demand that their employees come to the office much or all of the time.

Google Maps workers, asked to come back to the office full-time recently, fought back with a petition and threats of a strike and won a reprieve of 90 days. Elon Musk demanded that all Tesla staff come to the office full-time despite insufficient spaces at Tesla offices, resulting in Tesla staff getting recruited by other companies. Apple employees are pushing back publicly against the leadership’s demand for three days in the office, with a recent letter saying, “stop treating us like school kids who need to be told when to be where and what homework to do.”

The same struggles are happening at smaller US companies and across the globe. Yet these traditionalist executives fail to realize that the drama, stress, and tensions caused by their demands won’t matter. Remote work will win this fall.

That’s because the new COVID variants, which the Biden administration predicts, may lead to 100 million infections in the fall. The most dangerous is BA.5, which is much more resistant than prior variants to protection from COVID caused by vaccinations or previous infections. Its capacity to escape immunity combines with what appears to be increased transmissibility and the ability to induce a worse disease. Thus, it increased hospitalizations in Portugal, Israel, and other countries where it became dominant. We expect the same in the US as BA.5 becomes increasingly prevalent later this summer.

Perhaps you think COVID vaccines might protect us from this problem? Think again. A Kaiser Permanente study on the original Omicron strain, BA.1, found that after two doses of Pfizer, vaccine effectiveness against hospital admission was 41% after nine months. A booster shot increased effectiveness against hospitalization to 85% for a couple of months, but it wore off quickly to 55% after three or more months.

Note that this is vaccine effectiveness against hospitalization, not infection: the vaccine is much weaker against disease. And it’s for the original Omicron strain BA.1, not BA.5, which is much more capable of immune escape, more transmissible, and causes more severe disease. Let’s not forget that less than three-quarters of eligible Americans are vaccinated, less than half of all vaccinated Americans received a booster shot, and less than a quarter of those over 50 received a second booster.

Moreover, a new study shows that after initial COVID infection, each subsequent infection with COVID results in higher risks of hospitalization and death. In other words, after the initial infection, you end up with long-term or permanent damage that is exacerbated by subsequent infections. Thus, it’s essential to minimize the number of times we get infected with COVID.

Unfortunately, the government is not taking the steps needed to address this situation. Despite multiple requests by the White House, Congress refuses COVID vaccines and boosters, treatments such as Paxlovid, and research and production of next-generation vaccines. Election year politics at their worst.

The implication is clear: this fall will see a significant COVID surge. Moreover, we’ll be more vulnerable than before, given the lack of government funding for vaccines and treatments and the vaccine escape of BA.5. 

During both the Delta surge and the Omicron surge, traditionalist companies that tried to force their employees back to the office, and experienced extensive drama and stress over this coercive approach, had to roll back their plans, with all that effort wasted. Besides, the yo-yoing of going back and forth from home to the office and back home seriously undermined productivity, harmed engagement and morale, and impaired retention and recruitment.

In a few months, we’ll see the same yo-yoing at Tesla, Apple, Google, and other companies led by traditionalist executives. So why do they pursue this doomed effort to push their staff into the office? After all, these executives have the same information I do, and the implication is clear.

The key lies in what makes these executives feel successful and feeds their identity as leaders. One leader wrote an op-ed piece about this topic, saying, “There’s a deeply personal reason why I want to go back to the office. It’s selfish, but I don’t care. I feel like I lost a piece of my identity in the pandemic… I’m worried I won’t truly find myself again if I have to work from home for the rest of my life.” By honestly saying the quiet part out loud, this op-ed reveals how other leaders use false claims about remote work undermining productivity, innovation, and social capital to try to cover up their genuine concerns. This personal, selfish orientation speaks to a mental blindspot called the egocentric bias, a direction toward prioritizing one’s perspective and worldview over others.

It’s important to empathize with and understand where such leaders are coming from, but following their personal and selfish predispositions will hurt their companies’ bottom lines. What works much better is a hybrid-first, team-led model: a flexible approach where individual team leads consult with their team members to decide what works best for them.

That goes for large companies, such as Applied Materials, a Fortune 200 high-tech manufacturer. It adopted an “Excellence from Anywhere” modality that focuses on deliverables rather than where someone works. That also goes for middle-size organizations, including the Information Sciences Institute, a 400-staff data science, and a machine learning research center at the University of Southern California. ISI used this approach to gain leadership in hybrid and remote work.

Team members at Applied and ISI come to the office when they want to socialize or need to collaborate more intensely since, for most people, intense collaboration works best in person. Otherwise, team members stay at home since workers are substantially more productive working remotely. And as COVID cases increase in their area, the teams flexibly adapt their approach to collaborate and socialize remotely. 

This team-led, hybrid-first approach provides the best of all worlds. It fits the desires of most employees, whose biggest non-salary demand is flexibility. It also maximizes profits for companies since it boosts retention, recruitment, collaboration, innovation, and productivity. And finally, it addresses the risks associated with COVID variants, as well as other emergencies. The only obstacle is the personal, selfish orientation of traditionalist leaders, who need to recognize the danger they are posing to the success of their companies if they pursue their backward-looking coercive efforts to get their staff to return to the office.

COVID-19: The global pandemic that lost hundreds of thousands of lives will forever change the way we live and interact. These changes run deep and permeate throughout personal and professional interactions. The fundamental way we approach business has been altered, too, and our expectations on performance should reflect a new model.

According to the PEW Research Center, only 23% of Americans worked from home prior to COVID-19, with that number jumping to 71% during the pandemic. As we emerge on the other side, 61% of the US workforce is choosing to keep working from home, citing an improved work-life balance as a key driver.

For this reason, it’s clear the ‘traditional’ working model needs an adjustment. The current formula of input employment no longer works and companies must adapt to retain current talent, attract new employees and remain a viable business.

Before diving deeper into why businesses need to change, let’s first understand what the input model is.

What is the input model? 

Currently, much of corporate America works on an input model i.e. when an employee’s value is measured in time. Think work broken across hours utilized. Some models even detail how many hours employees are permitted to spend on a project. This way of working is familiar, it’s comfortable. This is the way businesses have worked for decades.

The pandemic forced us to learn a new way of working and managing time. We adapted to function in a fully-remote, at-home environment, completing tasks, hitting hours and tending to families in tandem. One might think this is a testament to the resiliency and dedication of a company’s employees… or, did we stumble on a better way of working?

Enter a new way of working: The output model. 

The output model focuses on measuring work based on positive results, rather than the hours put in. An employee’s time is no longer the commodity. It’s their efficiency, effectiveness and quality that identifies strong employees and offers the most benefit to employers.

The output model has been the model of consultants for years, but never absorbed into the W2 Full-Time Employee timesheets cycle. With the newfound comfort to work from home (WFH) COVID-19 afforded, the anticipation (if not expectation from employees) is W2 companies will adjust and adopt this new model imminently.

Since the WFH model became feasible, businesses have had to adapt to new ways of engaging with their staff, clients and partners. And with this “new norm” and the idea of remote working becoming more mainstream, the output model must be fully adopted into the business workspace. 

Operating on a 100% output model offers benefits to employees as well as to companies. However, trust, work ethic and independence must be established. It would not be surprising if, in the near future, companies first built a hybrid model of half week WFH or new employees are required to work from the office for their initial six months. This would give new employees the time to learn, educate and understand what is fully expected of them and for employers to build the trust needed for an output model.  

The output model also provides more flexibility for a work-life balance, which has been the missing piece to the puzzle, the holy grail for employees.

The great balancing act

The world is a balancing act, and with COVID-19 the world had to learn how to rebalance itself. The output model’s new way of working is just one of the changes we can expect to see.

In the end, it’s about the quality of output, not necessarily how much time is spent doing it.

Resources: Pew Research

https://www.statista.com/statistics/1122987/change-in-remote-work-trends-after-covid-in-usa/

America’s workforce is on the brink of crisis, and if our country’s leaders — both newcomers and incumbents — don’t prioritize workforce development now, the working class will crumble.

Companies large and small have increasingly turned to automated technologies in the quest to do more with less, leaving more Americans jobless. This trend has been so persistent that, last year, the Brookings Institution predicted a quarter of Americans could soon lose their jobs to automation.

The Pandemic Hit the Working Class Even Harder

Today, quite unexpectedly, many of the roughly 53 million Americans already trapped in a cycle of low-wage work now face unemployment. This is the same segment of the workforce most vulnerable to the threat of automation — and that threat now looms even larger.

The nearly universal pivot to remote work has fueled private-sector digitization efforts and will accelerate innovation advancing automated technologies. While this could ultimately lead to a more efficient, resilient national economy, it makes the future of the American worker uncertain.

Transforming Into a Tech-Driven Society

The pandemic will subside, but many of the jobs that disappeared upon its arrival won’t come back. The newly elected Biden administration must grapple with that reality now and implement policies that empower the working class to thrive in the digital economy of the future. It’s time for leaders to focus on tangible, scalable strategies for moving workers out of low-wage hourly employment and into digital roles that will soon define the workforce. The most critical component of any such strategy? Accessible, accelerated digital training.

Tech careers aren’t launched overnight. In order to be productive in important digital roles, millions of Americans will need to develop new skills and expertise. For that to happen, the country must shift away from the traditional learning pathways that have resulted in ballooning college tuition costs and a national student debt crisis and toward more affordable training pathways.

Before we can make this shift, we must think seriously about the implications of our transformation into a tech-driven society. Some already have: The demand for technical knowledge has fueled the rise of countless online education platforms, massive open online courses and other alternative learning outlets.

New Digital Pathways for the Working Class

Younger, tech-savvy Americans are especially keen to ditch traditional classrooms in favor of more practical learning experiences. According to an Insider and Morning Consult survey, 44% of Millennials with a college degree don’t believe obtaining that degree was worth taking on loans.

So what does a viable alternative to college look like? In order to support and encourage participation in alternative training programs that match the needs of modern workers and the future workforce, the Biden administration must establish incentives — especially for training providers.

Most job training programs get federal workforce funding in a similar way. First, an organization gets on an eligible training provider list managed by a local workforce board. When a trainee enrolls, the program gets half of the agreed-upon cost of training and then receives the rest of the money around the halfway point. In exchange for the funds, providers have to issue regular reports detailing participant graduation rates and success. Generally speaking, programs that don’t maintain an 80% graduation rate can be kicked off the list.

Although these rational requirements intend to ensure funding doesn’t go to programs producing undesirable outcomes, they do come with a couple of damaging consequences:

• The requirements unintentionally discourage providers from attempting to offer more difficult courses — the kinds of courses that could actually prepare unskilled workers for high-skill, high-demand jobs.

• They also push training providers to adopt smaller class sizes with more individualized learning at higher costs. If providers are incentivized to ensure nine out of 10 participants graduate, they might focus on teaching relatively basic career skills or on developing programs that spend intensively on each enrollee.

How to Better Arm Workers With the Skills of the Future

If we want to equip many workers with sophisticated digital expertise, the Biden administration must change how it allocates public funding. Instead of requiring providers to create elaborate reporting systems to receive federal funds on the front end, workforce agencies should allow programs preparing participants for high-difficulty, high-demand careers to collect payment on the back end — but only when a graduate gets a job.

This arrangement incentivizes providers to place as many people as possible into new roles at the lowest possible cost while taking the public system off the hook for the cost of unsuccessful participants.

Of course, there’s more than one way to approach worker training, but there might never be a better time. When again will the federal government distribute billions to state and local governments to invest in human capital?

Workforce development has never been considered a sexy talking point — in fact, it was conspicuously absent from media lists of key campaign issues leading up to the 2020 presidential election. The election results are in, but the leaders who focus on and provide viable workforce policies still have the unique opportunity to gain new supporters from a multitude of unemployed and underemployed Americans.

Imagine dealing with a business that offers products that always work, deliveries that arrive as promised, instructions that are clear and understandable, and self-service that’s easy to use. Their customers never have to contact them for the wrong reasons. They’ve created a frictionless customer experience.

Frictionless companies work hard to reduce customer service issues in every aspect of the business, so it’s no coincidence that they’re market leaders in their categories, such as Amazon in retail and online services, Apple in consumer electronics, Dyson in household appliance production, USAA in financial services, and Xero in SaaS accounting software.

These successful companies have long worked out that becoming frictionless has four undeniable benefits:

1. Being Frictionless Reduces Cost

For many years, the media has promoted the view that companies that want to cut costs will offer lower or inferior service by cutting staff or slashing hours. While it’s true that having fewer checkout staff or a lower contact center headcount saves money, doing so creates queues that quickly impact a business’s reputation.

In contrast, a frictionless strategy cuts costs in ways that are more sustainable by removing the need for customer contacts in the first place and reducing processing times.

For example, if order processes are streamlined and effective, customers will receive what they want accurately and on time; they won’t need to call or email the company about delays or errors, and the cost per transaction will fall.

When companies reduce friction, they save a huge amount of money because they’ve:

• Streamlined processes so they take less time.
• Reduced returns and refunds, thereby saving effort and costly make-good concessions.
• Met customers’ expectations, cutting the need for queries and contacts.
• Built more effective websites, apps, and other channels that reduce contacts, complaints, and queries about how these channels work.
• Replaced assisted contacts with self-service channels that customers want to use.

Yes, there’s a cost to reducing friction. For example, an organization may have to build the functionality to allow customers to track their orders and be notified of major changes to a delivery schedule. However, that cost will be repaid many times over if it prevents customers from having to ask for help or express their frustration.

2. Being Frictionless Drives Customer and Revenue Growth

Studies have shown that customers who have good experiences buy more. It seems intuitive that customers who’ve had on-time delivery from a company, when and where they expected it, are far more likely to place another order with that company, while customers who had to chase their orders or received them late will probably shop elsewhere next time.

According to one study by the Temkin Group, “77% of customers would recommend and provide a referral to a company to a friend where they’ve had a great experience.” The growth of Amazon is a testament to this. It could not have been achieved if Amazon’s processes didn’t work so well.

Amazon’s ACSI scores remain some of the highest, and being frictionless has meant that customers have turned to Amazon for an increased range of products and services.

3. Being Frictionless Delivers a True Competitive Advantage

Companies that reduce costs through less friction create a sustainable advantage via low cost and high recurring revenue. In contrast, organizations that reduce service levels (such as speed of answer, speed of delivery, or length of checkout queues) put themselves in a difficult place, since customers will leave and revenues will likely fall.

The lower costs delivered by becoming frictionless also drive other advantages. Amazon, at one point, compared its CPO (contacts per order) with that of another major online retailer and found its own to be 75% lower. This meant that the cost of each transaction enabled the company to reinvest these savings in lower prices (to drive more revenue) and greater marketing benefits like free shipping. A strategy that delivers both revenue and cost savings is clearly a winning one.

Yet being frictionless isn’t just about cost. Frictionless businesses have created new ways to share value with customers.

One example is Netflix, which, like other digital media sites, offers a different experience from traditional TV. With Netflix, deciding what you watch and when to watch it is a low-friction and more controlled experience. The customer can select the viewing device and tailor the watching experience—no more cable and antenna constraints.

Netflix’s flexible experience enabled the company to invest heavily in original content, further deepening its must-watch reputation with millions of subscribers.

4. Being Frictionless Enables Business Survival

One of the impacts of digital disruption and the emergence of digital-only innovators is that low-friction business models are now essential. Older-style businesses are burdened with high-cost physical networks and clumsy processes, and they face possible extinction if they don’t reduce this friction.

Consider these examples:

• Zoom has gobbled up market share from Cisco’s WebEx by being simple to use.
• Many regional high-touch banks are now challenged by new “fintech” players.
• Amazon has forced many conventional retailers, including BestBuy, Target, and Walmart, to add online channels (with various degrees of success).
• In insurance, disruptive businesses are emerging that price risk more precisely to each customer’s need and offer low-cost channels and self-service.
• In wealth management, digital or robotic advice models are emerging that undermine high-cost financial advice models.
• The airline industry was disrupted by low-cost carriers with simplified business models and self-service facilities, forcing incumbents to adopt innovations like self-serve check-in and online booking.

The outlook is clear: being frictionless is key for a business to survive. Will your business embrace these changes and thrive, or be left behind?

There are three key components to teaching Principled Entrepreneurship.

1. Discover who you are, create a vision for who you want to be, and develop a plan to get there

Creativity is highly correlated with self-knowledge, and passion with purpose. If we want to help students prepare for their lives as Principled Entrepreneurs, we have to move from trying to tell them what to do to helping them find their identity, values, desires, and passion, and then help them figure out a way to create new value from those that generate an economic return. Only then will the work we do on a daily basis no longer be just a way to make a living, but become a way of life. A vocation. A path to human excellence and happiness. In the foundational course we call “Vocation of Business,” we help each student explore their personality, dreams, and identity. 

Through various exercises, they create a list of the top values they have and describe how they intend to manifest these in life. Each student learns about mission statements and creates their very own after careful research and deliberation. They determine what virtues they need to cultivate to best support this mission. They go through what’s called the exercise to find out what their core motivations are and how that applies to their work. They are encouraged to explore and find their personal learning style. What many students don’t initially understand is that virtues manifest themselves and are trained in even the smallest everyday acts.

Training in virtue is akin to going to the gym. It takes the constant exercise of our will. Virtues are like a section of a workout routine. They start out as an aspirational activity, like wishing we could get out of bed when the alarm rings the first time. We won’t succeed right away; it’s one step forward and two back. Unless we apply our free will, we would give into our lower desires and give up. But as we stick with it, forgive ourselves for past failures, recommit, and never give up, the activity slowly becomes a habit.

We eventually do it without even thinking about it. Once we achieve that, we can focus on the next such activity, the next virtue to pursue. I ask each student to choose three virtues to which they aspire and practice them on a daily basis for an entire semester. Their reflection write-ups after this period of “training” always amaze and inspire me.

Virtues are so easily acquired, and become so powerful when we possess them. The students often point out that they found it remarkable how these habits come about through small but consistent effort, yet how amazed they are at how far they’ve come in just three months. Altogether, the virtues we possess add up to our character. As people, we are creatures of habit. How we see, how we think, how we act—even how we feel. All of these areas are opportunities for intentionality, for applying our will, for training in virtue and development of firm character.

What this means for Principled Entrepreneurs is that we live in a hopeful reality. Every human being has the ability to grow in their perfection, in their excellence, and it’s easier than most people think. Principled Entrepreneurs believe in humanity. Principled Entrepreneurs always see the human person—and that starts with ourselves—as the solution, the opportunity, the hope. Never the problem. I believe it is absolutely imperative to teach this to aspiring entrepreneurs, to add this to their arsenal of virtues. Discovering our personal vocation is actually the toughest thing for any one of us to figure out. It requires faith, insight, wisdom, experimentation, and determination. It is a very difficult process—much more difficult and complicated than memorizing facts and completing processes step-by-step. As a matter of fact, it is so difficult to do that I suspect a majority of people don’t do it and never find out what their actual vocation is. 

They never put the core of their energy into envisioning and becoming the best version of themselves. They go through life without knowing who they really are. You can’t be a Principled Entrepreneur without first discovering who you want to be.

2. Discover and develop your aptitudes, creativity, and strengths

When was the last time you lost track of time when you worked on something? The kind of experience we call “being in the zone.”

It happens when we are so fully absorbed in an activity, so enthralled, that we have such a high level of energized focus and fulfillment that it transcends time. Was your experience related to what you do for work? Most people I meet don’t experience flow in work, and I think any college or university curriculum should find a way not only to teach students about flow, but create situations for them to experience and replicate it and help them discover ways to find a career that allows them to experience flow on a regular basis.

At the Ciocca Center, we go about helping our students find their “zone” by having them try out a lot of different things. Through the various courses we offer the student, we ask them to do a wide range of business-related activities that they have never done before. The “first business” experience of the “Vocation of Business” class taps into creative and online activities and the definition of customer-centered value propositions. 

The Small Business Lab requires that students get hands-on experience in a variety of businesses, both established ones as well as startups that we work with. They’re taught to quickly study the competitive landscape, analyze the opportunities, manage the financial aspects of the business, develop strategies, and engage in team work to sell the new vision both inside and outside of the company. The theory courses combine research, presentations, and debates. The Principled Entrepreneurship course has a heavy focus on creativity, innovation, and communication.

The guided studies and internship programs give the students more practical experience in a variety of industry sectors and growth stages. Altogether, the students’ education is designed to expose them to all aspects of business and give them plenty of extended hands-on experience. Throughout this process, students are guided to think about their experience and analyze it from a perspective of growth in personal excellence and service: What value can I add? That context helps them to notice when they experience flow and gives them the support and confidence to make career decisions consistent with their true vocation.

3. Discover and develop how to apply the previous two points to create value for others, and learn to put failure in the service of the pursuit of excellence.

At Catholic University’s Busch School of Business, our freshmen business students’ first assignment in the Vocation of Business course is to start their own company. Specifically, students are asked to start a special interest social media account. By exploring what they have to offer others in terms of their unique interest or expertise, they create a social media effort that explains and explores this topic and recommends various products along the way. Through this three-month-long exercise, students internalize the most rudimentary but essential question of business: “How may I help you?” They are at once customer-centered and self-aware.

These blogs are then monetized in part through strategies such as affiliate marketing. As an affiliate of websites like Amazon, the student earns a bonus each time someone buys through one of their links. Thus, each student creates their own “small business” during the first semester of their freshman year. The hurdle I have to overcome with them is the same every year: fear of failure, especially in the context of a class. I have come to believe that students and aspiring entrepreneurs need to have permission to make mistakes.