No. 1 January 2007

I think it's service school season again. I know it always precedes and follows Christmas, and generally lasts at least 11 months, or so it seems. Know the difference between teaching and learning? Teaching is conveying information. Learning requires some kind of engagement of the students while they are receiving the information - understanding it, if you will. Some teachers think, "If I taught you this, then you must have learned it." But that never works. Teach students to understand, not merely to pass a test, and the proof will always be if they can teach it back. That being said, thank goodness this industry is blessed with some terrific trainers and teachers who really care about whether you understand what they're teaching.

Here are a couple of facts that you might not know about your customers from the book "Satisfaction - How Every Great Company Listens to the Voices of its Customers" by Denove and Power:
(1) Customers who run into problems but whose problems are handled swiftly and politely actually wind up being more loyal than customers who never encounter a problem.
(2) Exceeding your customers' expectations matters much more than performing at a consistently high or even an extremely high level.

2006 has to be the most unusual year that I've ever seen in the OPE (Outdoor Power Equipment) industry. But wait a minute, sow was 1996. And come to think of it, so was 1992 and 1987 and 2003 and 1984 and 1971 and ...

Jim Collins wrote two of the best business books of all time, "Good to Great" and "Built to Last." If you haven't read both of them, stop what you're doing and read them NOW! They are that good and quite readable. And both will forever change how you think about and run your business.

"People are not your most important asset. The right people are." -- Jim Collins, "Good to Great"

Tecumseh finally released its third-quarter financials. The company has been having a rough time in all three of its business segments: compressor products for HVAC, electrical components, and especially in its engine and power train products. Tecumseh brought in AlixPartners in August 2005 to help turn around the engine division. Now, with the guidance of AlixPartners and with the hard work of Tecumseh management and employees, it appears that the engine division is now stabilized and better days lie ahead in 2007. It's still not getting any easier for most engine manufacturers. Lack of hurricanes in 2006 depressed generator sales, and lack of snow and customer aggressive inventory management policies this winter has depressed snowthrower sales. One important sign for Tecumseh in 2007 will be how much snowthrower engine market share it can retain against other domestic and import engine manufacturers' renewed interest in that engine category. We know many good people at Tecumseh, and we wish them much success as they continue their journey into better times.

Recently, I've been thinking about LESCO and the effects it felt when it eliminated and later reinstated its direct sales force. Not only did direct sales decline, as LESCO expected, when it eliminated its sales force, but same-store sales declined too, which was unexpected. LESCO very quickly re-established its direct sales force. How important are the relationships between your direct sales force and your customers? What would the impact be on your business if you eliminated your direct sales force and the relationships it had with your customers. LESCO discovered the hard way that it was a whole lot more important than it thought.