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Good Housekeeping Seal Of Profitability

November 16, 2009

The trash containers were over flowing, the floor was dirty and the employees seemed to be going about their jobs in an uninspired manner. While I was there to buy hamburgers and not to do business analysis, I quickly came to the opinion that this was a poorly run operation.

A long wait to order and less than energetic counter personnel did nothing to alter the first impression. We found empty napkin dispensers and straws spilled all over the counter. In the fast food franchise business where efficiency, cleanliness and standardized high quality are the keys to success, this was obviously a below average performer.

There a number of methods that can be used for business analysis. One particular standard is nearly infallible in determining the health of any business enterprise. It doesn’t require time consuming analysis and it enables you to draw prompt conclusions. In fact, within minutes from entering a business, I will quite often be able to make a fairly accurate diagnosis of its general condition.

Good housekeeping! A glance at the housekeeping will often speak volumes concerning a company’s general condition. It is a skill that was taught to each of us by one of the best natural managers that we know. Our mothers! “Clean up your room” was the early command that we all heard.

Recently I once again found myself in the fast food lane for a post game meal while returning from a baseball game. This time it was an establishment operated by the industry leader. It was impossible not to listen in on a dispute between a customer and the manager.

The customer, a father with a large following of small children, was perturbed that a number of advertised specials were not available. The manager, while making a number of plausible excuses, showed little tact or sympathy for the customer. It had obviously been a long day. I began to look around and make a few observations.

Bingo, right behind me there it was again. An filled trash can was overflowing next to where patrons were eating there meals. I watched the counter personnel. There were too many doing too little. A far cry from the cheery energetic faces that you see in the ads. A look behind the counter exposed dirty floors, spilled french fries, and a disconnected milkshake machine hose that had dripped in every direction. The place was a mess.

It should have come as no surprise that we waited for fifteen minutes for the lowly hamburger that had made this company billions. Just one look at the housekeeping and the “I don’t care look ” in the eyes of the employees indicated that this was not a well run operation.

Without hesitation I would predict that each of these two establishments, operated by different but leading companies in their industry, are below average performers. While their volume might be high as a result of their locations and national franchise affiliations, I would predict that their profitability is below average and the employee turnover rates are high.

What do they suffer from? Poor housekeeping. They didn’t “clean up their rooms” and it shows. Why is housekeeping so important? Good housekeeping shows respect for the business, the customers and the product. Through good housekeeping a business communicates that it pays attention to detail. A business that pays attention to details will set high standards that will permeate all other areas in the organization.

Employees take care of things they respect. While we may not have always “cleaned up our rooms” to our mother’s satisfaction, we did learn to take care of those things that are important to us. It’s the responsibility of the business to establish high standards for housekeeping. In so doing you will be sending a message that attention to detail is important in your business.

I toured a factory in Chicago last week that employed over one hundred people. Its machinery and shop floor were clean and well maintained despite being old. The employees lunch room was immaculate, in far better shape than either of the fast food restaurants. I wasn’t surprised that this was a profitable, rapidly growing business in a competitive industry. Good housekeeping is a good indicator of a well run business.

The managers of a troubled company attributed the dirty and disorganized appearance of their tool room to sloppy employees. I observed that during lunch break these same “sloppy” employees would withdraw to the parking lot and take fastidious care of their cars. These weren’t employees incapable of maintaining a clean tool room. This was a company that hadn’t recognized the importance of details and had failed to establish high standards.

Because it’s your business, remember to follow your mother’s advice and establish high standards for good housekeeping.

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