Why Airplanes Crash
What one successful CEO learned from air crash investigations – and how it all applies to managing any organization
What does managing a business have to do with airplane crashes? For Jeff Quipp, the answer is not so much about the crashes as it is about the extraordinary insight into systems failures that can be gained from thorough investigation and thoughtful analysis.
Jeff, who is President and CEO of Search Engine People (SEP), a Pickering-based company specializing in search engine optimization, pay-per-click and inbound marketing, recently shared his philosophy in a talk to the Ajax Pickering Board of Trade.
The starting point is that Jeff always wanted to be a pilot. He's still fascinated by the world of aviation. Mayday, the TV series about air accident investigations, is one of his favourites, and he points out that you can learn a lot from the approach taken by air crash investigators.
What he's learned, he explained, is that no matter how complicated and confusing a system failure may seem to be at the start, the true causes can almost always be found if you keep looking hard enough and if you keep asking "Why?" long enough until you finally drill down to the root cause.
And once you've identified the source of the failure, the solution is usually pretty obvious.
Air crashes can often be reduced to a single failure somewhere up the line. A part fails, a procedure has a flaw, a series of seemingly routine circumstances add up to a sudden unforeseen catastrophe. Business failures – if we first recognize them as failures, and if we dig deep enough – can be often be identified and solved in surprisingly similar ways.
As Jeff built his business from start-up to significant player, he had his share of setbacks and failures. There were many times when it felt like he'd hit the wall. But each time, he sat back, looked around, thought it through and figured out what lessons could be learned from failure.
So far, he's up to at least 13 lessons learned, and those were the subject of his talk. He very kindly agreed to share his notes with me, and here's what he had to say.
Lesson #1: Hire to compensate for your weaknesses.
When I first started SEP, I was wearing all the hats, doing many different tasks myself. At first, I tended to like all the job applicants who could do the same, who were good at many different things. But I came to realize that this was a mistake.
- Understand your own strengths and weaknesses, and those of others in the organization
- Hire to compensate for your weaknesses
Today at SEP, we try to identify the strengths and weaknesses of each person, and put them in a position to work to their strengths.
Lesson #2: Hire for passion and fit - skills can be trained.
- At the start, we hired the first few employees, and they helped grow the business, but workload only increases
- They weren't passionate about getting clients results, or even learning -- only getting a paycheck
- They drained the energy from me
- Then we recruited three key people, one at a time, and it took me four years
- Passionate people give you energy
- One result was that we made the Profit 100 list in 6 consecutive years
Today at SEP, our HR and Hiring Managers run a series of tests to score people on passion and fit.
Lesson #3: Price to do the job, not to get the job.
- Initially I made the mistake of pricing to get the job, and then would work way too many hours to get it done.
- This meant either that clients that were paying less than the job was really worth, or I worked so many hours that my family would suffer
- Also, the only negative reviews we've ever received were from clients that couldn't or wouldn't pay what we proposed, and that we bent over backward to accommodate anyway
Today at SEP now have implemented a system of checks and balances to ensure that we price to do the job -- and not just to get the job
Lesson #4: Make sure you have a great finance person -- this is critical.
I ran the business virtually blindfolded until 2014. Sure I'd get year-end financials, but had no idea about a lot of really important things like…
- Which departments were really profitable or efficient
- Which individuals were really productive and making money for us
- Which clients and what kind of jobs were profitable for us
- I'd have to go by bank account balances, and if I asked for more information, I'd always be told "there is no way to get that"
- We had three separate finance people -- until we recruited our current CFO
Today, we're got a very strong CFO, who we're brining on as a partner!
Lesson #5: Be selective in choosing clients.
- Not mentioning any company names, but we've accepted clients in the past with completely unrealistic expectations, or no business models
- Good clients are like good employees -- they give you energy
- Bad clients cost you good clients, and good employees
Today, each client is vetted according to a standard set of criteria to evaluate fit and expectations, before being accepted as a client.
Lesson #6: Don't hesitate to fire fast – both clients and employees.
We've had clients blame us for their failure when they had no real business model. It put so much pressure on our team, that our team members wanted to quit.
- Poor client/employee choices will take time away from good clients/employees
- In some situations, poor clients want to win at your expense
- We've also had negative employees poison everyone around them
- Don't change your system to accommodate a particular client or employee
- When such employees or clients that just don't fit are identified, investigate the real cause, but then take action
Today at SEP, our overriding mantra is Win Win Win: The client must win, the employees must win and the company must win.
Lesson #7: Ask the following five "Whys."
Whenever you encounter an issue, never ask "Why?" just once and be satisfied with the answer. Generally, the first few answers are a smokescreen or identify symptoms, but do not identify the real cause.
Asking Why at least 5 times, gets you to the real cause
- Why are results not as planned?
- Not enough time
- Why was there not enough time?
- The client asked me to work on another project for them
- Why did they ask you to work on the other project?
- They didn't like the report Group A produced
- Why didn't they like the report Group A produced?
- And so on, until the whole story is out on the table
Today at SEP, we are actually hiring an "Incident Investigator" trained to keep asking "Why" until he/she can get to the real root of the problem.
Lesson #8: Understand that lack of humility means unwillingness to learn.
When hiring, look for humility. It means the individual is willing to learn.
- People unwilling to learn are not a good fit for rapidly changing industries or companies
- Our experience suggests that those "over-confident" and cocky are not ideal employees
Today at SEP, we assess and score humility as part of its interview process.
Lesson #9: Do not create a culture of entitlement.
Entitlement comes from giving people something when they didn't earn it.
- It becomes an expectation
- You can ruin good people by creating entitlement
- SEP used to give annual bonuses, and it became an expectation
Today we only give "performance bonuses" to individuals based on achieving specific objectives!
Lesson #10: Remember that what gets measured is what gets done.
- People need goals, otherwise they fill their time with busy work
- Goals help employees make decisions about what is important to get done
- People need to know you're watching
- People need to be held accountable, and they need honest feedback
Today at SEP, feedback is viewed as a tool to help people improve, not as punishment. We train managers to give routine feedback, and are even designing real-time-results feedback into the technology we're developing.
Lesson #11: Use technology to augment human skills.
- Technology is taking over aspects of most businesses
- Those that do not adapt, and lead, will be left behind with lower margin opportunities
- Why? People make mistakes
Today at SEP, we are working to develop technologies to:
- Measure individual and client performance
- Give real time feedback (like gauges in a cockpit)
- Give warnings and alerts (like the airline industry)
- Ensure processes are followed (e.g. checklists)
- Track all activities and actions (think of the "black boxes" on a plane)
- Automate mundane/repetitive/low value tasks (think auto pilot)
Lesson #12: Expect growth not to be linear - it is a series of plateaus.
SEP's growth came in fits and starts. We hit various plateaus, and each time had to figure out how to get beyond each one to the next level.
- At the 5 people plateau, the problem was me (trying to do everything myself)
- At 20 people, the problem was building systems and procedures
- At 50 people, the problem was building – and not over-building – management systems
- At 100 people, I'm not sure yet. We've been wrestling with this one for 3 years, and I'm pretty sure we've got it now, but will require at least another year of work
Lesson #13: Clients want predictability – make sure that they get the desired results.
So today at SEP, the recommendations from each of the previous 12 lessons I talked about are there to help increase predictability. This is our system, and it will work -- but only for those clients and employees that buy into it.
Many thanks to Jeff Quipp for his talk and his remarkable insight, and for agreeing to let me share it with readers of the blog.
Search Engine People (SEP) is Canada's most trusted SEO, PPC & inbound marketing company. Founded in 2001 as an SEO company, SEP has rapidly evolved into a highly-respected, full-service digital marketing agency providing online marketing services to small, mid-size, and enterprise businesses.
Recognized as one of the 100 fastest-growing companies, we are Canada's most experienced SEO and inbound marketing agency. Our team of industry leaders is constantly expanding and innovating. We currently employ more than 65 full-time team members, many of whom are recognized industry experts who are frequently sought after by major conference organizers to speak on digital marketing, search and social media marketing.
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