Every now and then I simply want to weep. Mostly because "Little House on the Prairie" reruns can really get to me now that I’ve got my own family. But sometimes it’s because I read an article on business management and it just reminds me of how far the legal industry has to go until it catches up to… Domino’s Pizza.
There’s a nice post over at Brand Autopsy about how Domino’s Pizza CEO David Brandon, when he was hired in 1999, went on a crusade to lower employee churn. In the fast food business, yearly worker churn can go as high as 300%. That’s a huge drain on resources and a big, bad marketing black-eye. So he reduced Domino’s 158% churn to 107%. How? Read on…
You may recall a post I wrote a month or so back ("When your only tool’s a $115k hammer…") about how I think that bragging on how much you pay your first year associates is bad marketing mojo. I also said that trying to build a good roster of young attorneys based solely on monetary incentives was unwise. I also said… never mind. You can go read the whole she-bang-a-bang if you like.
My point is this — you don’t build and maintain a great team simply by paying them more.
And Domino’s Pizza proves my point. What were CEO David Brandon’s keys to successfully lowering employee churn?
- Hire Better Managers: According to their research, the critical success factor of a store is manager selection. One way Domino’s selects better store managers is to have each candidate undergo an online test to measure their financial acumen and people management style.
- Give Managers Better Tools: Each store has computerized tracking programs detailing store sales figures down to the employee level with stats like average order size per employee and the time it takes to get a pizza order out the door. These tools help managers to track, reward and encourage employees.
- Incentivize Managers More Meaningfully : Besides profit-based bonuses, Domino’s also gives stock options to top-performing managers based on customer service measurements and store sales growth gains.
Let’s be clear — although all of these programs directly affect managers, they decreased the churn of all Domino’s store employees, not just the managers. When the store managers were better chosen, better equipped and better encouraged, they provided an environment where the overall employee churn dropped by a third. A third! That’s huge! HUGE! Are you with me on this? And study after study shows that high employee satisfaction — which is always indirectly proportionate to low employee churn — is one of the best drivers of customer satisfaction.
What does this mean for law firms?
The partner on my shoulder says, "Bah! Restaurants! Pizzerias! Fast food, at that. We work in a profession. A calling. There’s no relationship whatsoever."
I beg, as usual, to differ with my imaginary partner. In fact, I would say that if the relationship of good management to employee satisfaction is important for workers in a fairly simple, rote-work environment, it will be significantly more important in a high-stress, knowledge-based, service-oriented environment such as that of most law firms.
Look at it this way; the number of tasks that need to be managed in a Domino’s is relatively limited. The volume of management "stimuli" is fairly low. But even so, Domino’s has shown that good, well equipped managers help to keep their employees happy and reduce churn.
How many more managerial tasks are there at a law firm? How many more times does a young associate, a paralegal, a secretary or an employee at a firm need to rely on the guidance of a partner or firm manager for direction? I would say that your typical law firm is hundreds, if not thousands of times more complex a place to work than a Domino’s.
And yet law firms do almost nothing in terms of training, equipping and rewarding their partners in terms of their roles as managers of associates and employees. In fact, I don’t think I am aware of ever having heard of a firm that had, as part of their partnership track, a requirement that associates undergo any kind of training in personnel, project or group management [If you have a good example, I'd love to hear and/or blog about it; please email me]. Like so many other skills at law firms, associates either pick it up by osmosis… or they don’t. Which mostly means that they don’t.
Look at your firm: how many members of your management committee have any real experience managing people, projects, groups, processes? Other than directly within the practice of law, I mean. Has your managing partner ever had more direct reports than a secretary before being put in charge of the entire firm? Does your director of facilities have more experience managing people than your MP? Are these questions making you uncomfortable?
What does associate churn cost your firm? How much could you save every year if you invested some time and money in training your partners how to better manage people?
Managing your firm takes different skills than practicing law. If you have more than 10 lawyers in your firm, you owe it to yourself, your attorneys and your employees to spend a little bit of time learning how to behave like a business, rather than a pack of practitioners who simply share copiers, coffee machines and letterhead.
If Domino’s Pizza can do it, why can’t you?