November 11, 2015 by Mark Hammerstrom
We all have habits, of course; both good and bad. Yet, it seems to me that when the word ‘habit’ is used it is more often than not preceded by ‘bad.’ Certainly, the consequences and impact of ‘bad habits’ can be devastating if not corrected; but bad habits don’t change by themselves, either in our personal lives or in business. Changing them takes a willingness and commitment to change and often just plain hard work. However, many of them are so ingrained in our actions that we don’t even know we have them. Yet sometimes all it takes is a focus on changing one thing and other positive changes fall into place.
A while back I ran into a book on habits called The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg. Duhigg, besides being an author, is also a journalist for the New York Times and his book is a very insightful look into how habits shape not only our personal lives but our professional lives as well.
One particularly interesting chapter centered on Alcoa Aluminum. In the late 1980’s the Company was in trouble and brought in a new CEO named Paul O’Neill to fix things. Of course, Alcoa had been virtually a household name for decades making the aluminum that goes into everything from pop cans to our cars. Anyway, in his introduction to the investment community, O’Neill, rather than talking synergies, shareholder value, ways to increase cash flow and stock price, came out and talked about something completely different: worker safety!
As Duhigg reports, O’Neill realized very early on there was a critical need to break some very bad business habits ingrained into the culture of the company which were leading to high worker injury rates. Those injury rates were symptomatic of some very deeply ingrained bad business habits that were also damaging the company.
Quoting Duhigg and O’Neill: “So how did O’Neill make one of the largest, stodgiest, and most potentially dangerous companies into a profit machine and a bastion of safety? By attacking one habit and then watching the changes ripple through the organization. ‘I knew I had to transform Alcoa,’ O’Neill told me [Duhigg]. ‘But you can’t order people to change. That’s not how the brain works. So I decided I was going to start by focusing on one thing. If I could start disrupting the habits around one thing, it would spread throughout the entire company.’ O’Neill believed that some habits have the power to start a chain reaction, changing other habits as they move through an organization. Some habits, in other words, matter more than others in remaking businesses and lives. These are ‘keystone habits,’ and they can influence how people work, eat, play, live…”
Well, I will leave it to you to read the whole story, but O’Neill turned the company around by breaking bad habits which had caused not only huge decreases in worker productivity, they also improved the safety and efficiency of the manufacturing process. So, while breaking the company of bad habits he not only reduced on the job injury, he also revived a company moving rapidly toward extinction. Amazing story.
So, what about your business habits? One thing we encourage our clients to do is look with fresh eyes at how they are handling their delinquent accounts and how much may be driven by habit, and not good business practice.
One area to specifically focus on is the detail of the information you receive from your customers. Do you regularly review the content of the agreements your customers sign obligating them to pay you for your services? Clear understanding of payment terms is beneficial to both parties, and will not only ensure you have the best document in the event you incur a debt which needs the help of a company like ours, it also ensures you are in line with the most recent changes in the law.
Don’t let unrecognized bad habits cause unintended consequences for your business! UCS is here to help make sure your bad debts are collected in the most efficient and professional way possible.
Founded in 1950, United Credit Service, Inc. is a full service, licensed revenue cycle management and debt collection agency in Wisconsin providing effective, customized one on one management and recovery solutions for our business partners. Visit our website at http://www.unitedcreditservice.com, call 877-723-2902 or check out our YouTube video.