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Guest Nelson Thulin joins Funeral X to explain the benefits of Employee Incentive Compensation Plans and what factors should be considered when creating an incentive plan. For more information about the incentive plan for your firm, you can contact Nelson at 480-556-8510 or nthulin@johnsonconsulting.com.
See the complete transcript here:
Robin Heppell:
Welcome back to the Funeral X podcast. I am Rob Heppell and I’m joined today by special guest, Nelson Thulin from Johnson Consulting. Hey there, Nelson.
Nelson Thulin:
Hello, Rob.
Robin Heppell:
Hey, great to have you on Funeral X. And as we get going, maybe could you let the folks who are listening know what you do at Johnson Consulting?
Nelson Thulin:
Sure. In fact, my boss is probably wondering that too. I’m the Director of Business Consulting at one of the divisions within the Johnson Consulting group, and we specifically worked business owners, thought leaders to develop strategies to improve their businesses and hopefully have an impact on funeral service as a whole.
Robin Heppell:
Cool. Now, I know we’ll get into a specific topic in a little bit, but let’s dig into you a little bit further. Can you give a little bit more about your background, where you grew up?
Nelson Thulin:
Yes. In fact, probably what’s more meaningful for everybody than whether or not I was born in a log cabin in central Illinois would be my career path has been about 35 years in the making. I started off just working for a mom-and-pop operation with about 100 calls. I ventured on to eventually buy into some funeral homes, built a new funeral home, bought and sold and all that went into that. Eventually found myself within the corporate structure and through a process of multiple mergers and acquisitions I ended up, my management career in funeral service overseeing 15 funeral homes doing about 3,500 funerals a year with about 200 plus employees across the group.
So I understand what it means to have a team meeting when there are 2 people and a cup of coffee involved or when there are 40 people in a room and you’re trying to explain the newest initiatives. And so I think if anything else, that is my greatest strength is just understanding the variety of different types of businesses that are in funeral service and can relate to them and the employees and everybody that’s a stakeholder, so.
Robin Heppell:
Yes, especially from all those different levels. Hey, Nelson, how did you get introduced to Johnson Consulting? Or when did you make that jump from where you were, I guess in the funeral corporate world to working with Jake?
Nelson Thulin:
Yes. So as far as Johnson Consulting goes I think if you keep your eyes open and your interest upon funeral service in general, you’re going to hear about Johnson Consulting. So over the course of, I guess now I’m at about 36 years in funeral service. And for about 30 of those, you would hear Johnson brought up in varying degrees, whether it was somebody working on a succession planning or a webinar or seminar or something like that. But actually, this month marks five years since I went in with Johnson’s salting. I moved out of the corporate world and this opportunity existed and it’s been a great utilization of my background.
I tell people all the time that I’m basically still doing the job that I did for 18 years prior, because it’s still talking about basic principles and how you can improve your operations, how you can impact the workplace and create a better environment for the people that are in that space with you. And of course, taking care of families and providing the highest levels of customer service, all of that I was focused either in my own business or working within the corporate structure for probably 18, 20 years of management now I can bring the bear for people that are looking for that, and maybe don’t always have the resources of being a part of a large organization.
We can bring an awful lot of that information to them. In fact, not long ago, we added up all of our collective years within the consulting group and we have over 600 years of combined historical background and experiences and things like that. So I always tell people, you’re not just hiring one consultant. You’re hiring a team that has quite a varied background. And I can honestly say I’ve brought some pretty crazy scenarios to people and vice versa, and believe it or not, it seems like all of us have one way or another said, “Oh, I remember back in Texas,” or, “When I lived in Arizona we had a funeral home that had that same issue.” So hopefully we can bring the experience and the background and save people the learning curve that most of us had to go through to get here.
Robin Heppell:
Yes. And that’s what I’ve noticed too, Nelson. If you’re from the independent side growing up, whether it’s from a mom and pop funeral home, or even starting my own digital marketing service, if you’re starting it from the ground up, you’re not really aware of some of the frameworks that established companies have that work to their benefit to just make everything more uniform and have those standard operating procedures in place. So, Yes, I think it’s great that you can take that experience, those frameworks and then apply them to companies that just wouldn’t have that information to then get them to operate more effectively and efficiently and more profitably as well.
Nelson Thulin:
Yes. And John DiJulius, author of customer service revolution, one of his statements is that, and I’m not sure exactly of the number. I think he said, you are an average of the six closest people that you interact with, and throughout your life whether or not it’s your friends at school and then at college and then where you work. It’s usually an addition of those people that average those influencers, and there’s nothing bad about family traditions and our way of doing things. But if you are a product of the six or seven closest people to you, you limit yourself.
And so that’s, for me, to be honest with you, a lot of what I probably bring to clients is what I learned from other clients. And that being that conduit of sharing. In fact, it’s a big part. One of the initiatives that we’re working on now is to develop study groups exactly for that purpose. We believe we know the combination of people out there where they live hundreds of miles apart, but we know their operations are similar to give them an opportunity to match them up and have really constructive, insightful conversations, especially when they’re dealing with the same issues. But that’s another topic for another day.
Robin Heppell:
Sure. Nelson, let’s dive into, what are some of the services? Today we’re going to be talking about incentive compensation plans, but besides that one, what are some of the other services in the business consulting department at Johnson Consulting that you look after, like as a team, what are some of the offerings that you make available to the funeral profession?
Nelson Thulin:
Yes. So that can be a wide scope of things. Any funeral homeowner, if they sat back and thought of all the individual concerns that they have, it sounds a little boastful, but we’ve been in those shoes. We’ve worried about the same things. We’ve stayed up late at night, thinking about all the things that bother them. And so I would say, first of all, I tell people we’re the Mayo Clinic of funeral service management. You come to a collection of enough people with enough experience and background, we pretty much have the bases covered. But to help organize this answer, we always talk about funeral homes and cemeteries being thought of as four fundamental pieces that make a really successful funeral service operation. And that is customer service, all things that go into taking care of families, as well as the guests that come to services.
When you think about businesses all over the world, pay tens of thousands of dollars to try to bring potential clients and consumers into their shops, into their stores, wherever they do business, to be able to demonstrate their service and their merchandise. And by the traditions of funeral service, we just naturally have people coming to our place of business and we get to showcase our services and our merchandise. And it’s a tremendous benefit that I don’t know that we always think about it in terms of the impact that we can have.
We’re always of course thinking about the family and their best interests and taking care of them. But you have probably on average 75 to 100 people attending a service, it’s a great opportunity to put your best work out there in terms of just the way you conduct yourselves, and interact.
So customer service is a big part of it. In the workplace, there are all kinds of gurus out there that will tell you that as an owner, your interest should lie and take care of your employees first because ultimately their impact is on your clients. So if they’re taken care of well, if they’re happy in what they’re doing, inspired by the services that they provide, they will absolutely be the best possible person to work with the people that come to your funeral home. So we really take that very, very important. And that’s what we’ll talk about with the incentive compensation discussion.
But again, to be able to create a rewarding environment, that’s not only from a compensation level good for the employee, but also inspired so that they see a long time career, not just here’s where I am at the current time and move on, but that when they come to work for you, they actually are thinking about career placement.
And then we talk about the marketplace. Of course, that’s always on everybody’s mind as far as how they’re perceived by the world. And that’s from a Funeral Results Marketing perspective, I preach that all the time that especially through the pandemic websites became really … we used to talk about that, that’s your virtual front door, but I think for many people it became the real door in that the way your website it looks and how you interact with it is just as important as walking up to a funeral home that is a clean and nice set of flowers and a smiling face at the door to greet you inside. So we promote that, and obviously a lot of community service suggestions and things that have been tried and true that we’ve all done in the past.
And then finally, where it hits the pavement is the financials. We always talk about, if you do the other three really well, the financials probably should fall in line, but it doesn’t happen without any concern or consideration. And especially when we think about financials, we’re thinking about the life of the client owner. And this funeral home may exist for … we see them all the time, hundreds, 150, 175 years old, and a lot of people have come and gone over that time. The business may endure, but we want to think about the owner too. And that as they come into the business, what is their life’s journey going to end up being is all the time and effort that they place into it, what is the end result?
And so we take that very, very seriously when we talk about exit strategies or generational transitions and things like that so that everybody can look back on a life’s work and feel rewarded for it. And not just it’s the way I spent my time in this world. So those are the four main areas we talk about customer service, workplace, marketplace, and financials.
Robin Heppell:
Great. Now, so for today’s topic, we’re talking about employee incentive compensation plans, and I’m really interested in what you have to say. When I was working at the funeral home, there could be an annual bonus, maybe not. You never knew. And that was really about it. So I’m really interested in what you have to say. So maybe just, can you give us an overview of this program and how it could be laid out and then we’ll get into maybe how folks could get started or what they could at least take away from today, just to have a better understanding. So maybe, Yes, explain how did you bring this up and how is it now then offered to funeral homes?
Nelson Thulin:
Sure. I want to just go back to what something you just said there, when you were in the funeral home environment and you maybe got something, you maybe didn’t. You might not have even been entirely sure why you’d get it. And I’ve seen a lifetime working within other people’s programs and especially in a role where I was the guy handed out the checks or not, and here, oh, you earned $500 or a $1,000 or whatever it was. And I can’t tell you how many people said, “Oh, what’s this for?” And any program that’s rewarding something that the people don’t understand what behavior they’re being rewarded to, it’s as simple as if you’re, and I don’t mean to be crass, but if you’re training your dog, he needs to associate the treat with sitting or shaking hands or rolling over, or probably from a funeral service perspective playing dead.
But the point is that as simple as that is, we don’t do that with employees oftentimes. We just dangle these carrots and somehow miraculously, and really the results are just that. If it works out great, let’s share some dollars with everybody. But if it doesn’t, the problem is a lot of times when it doesn’t, because there’s an expectation there, there’s still funeral homes that pay things out. I remember somebody coming to me once and said the reason he was interested in an ICP is because I told him the ICP program is set up so that it pays for itself. We set targets, we set expectations such that the increased business funds the pool, and everybody understands that. And I’ll give you more detail, but that way there is no confusion at the end of a quarter, and that’s where we usually suggest, that people payout quarterly.
People will know, for one, we’re giving them updates to say, here’s how far you’re off of your goal in order to hit your bonus. But they’ll know. If we’re having a bad quarter, most employees from people standing the door to people making removals and transfers, they know when you’re having a slow period or things are just going crazy. And we tie that just natural understanding of the growth or not of the business is tied to the results. And in that process, I think this is the most important thing, is we start to impart an ownership mentality into the team members.
For many people they just come in, they want to take care of people and they’re happy to get the paycheck that they get and they come and go and do what they need to do, but not everybody really comes at it with an ownership mentality. And in this situation, they are owners of their particular time and their impact on the business. So if I have a positive impact on the business, I’ll be rewarded positively. I can make more money than what I’m scheduled to make. And if I don’t put forth the effort, I’ll still get my regular paycheck, but the extra dollars won’t be there because I haven’t performed that extra level of service.
And again, we base that not on extremes. I always sit with clients and we really talk about where your team is at, and let’s set up a stretch goal, but stretch. Something that requires you get on your tippy-toes, not to jump and do a slam dunk. We’re just not all capable of doing that, but we can stretch. And especially if you have a bigger team, everybody’s stretching in the right direction, you’d be surprised what goals you can reach, so that’s a big part of it.
It boils down to this. We look at, what do I want to say? Goals that the owner wants to hit, or some kind of target or metric. And usually, we encourage them into a couple of main areas. One is customer service. We don’t want anybody’s experience ever to be impacted by somebody that’s only thinking about what the contract looks like at the end. There should be a well-rounded, full perspective on what that experience is for the family. So, the number one goal is because customer experience. But then after that, we always work off of call volume. Sometimes owners are a little bit hesitant to show what the books really look like, and we are too. We don’t think that’s anything that you need to share with anybody, but we calculate our goal, our financial goals based upon a sales average for the company.
And then we establish a stretch goal for the number of calls. Usually, surprisingly, it isn’t that extra calls, maybe two or three in a quarter. And again, if we hit those goals, then the pool itself is funded. And as a funeral homeowner, you know that going in. We explain it to the employees so they totally understand that whatever it is if it’s 30 or 75 or whatever number of calls in a quarter, that’s the threshold. If we don’t pass beyond that, there really is no ability to fund the pool. And then the same thing, we talk about return rates on surveys that we need to have a representative sample of returns so that we can really say, Yes, 30% of your families think you did great, or 30% of your families say that you struggle with follow up and details.
And again, we tie those different items to behavior that we want to improve. So it’s not about discipline. It’s not about just rewarding mindlessly dollars for extra calls, but we look at the specific behaviors that we want to work on. And we do that because on a quarterly basis, we work with the team and it’s not just, “Hey, Rob you had a $1,000 opportunity, and you only came up with $750. Hey, close. But you know, good luck, better luck next time.” Instead, we’ll say, “Hey, Rob, you got three-quarters of your ICP bonus. Great. Now let’s look at the one order that you came up short on because in the end, we really do want you to maximize out your potential. Because think of it, if you are as an employee, I certainly am as an owner.”
So we work with them on a quarterly basis. If we look into the numbers and say, “You know what, Rob, it looks like compared to your peers, you struggle on urn sales. Everybody else is having a 40% sales rate, but we notice you’re at 19% or something. Let’s talk about that. How do those arrangements generally go in terms of talking about earns and things like that?” So we give them the answers to how they can fix those deficiencies with the goal being that we want you to maximize out your potential. The greatest thing that we can have happen is that if you are up for a $1,000 quarterly bonus, we want you to get $4,000 at the end of the year, or at least the remaining quarters to maximize what you can get. Does that help?
Robin Heppell:
Oh, for sure. Yes. I’m just wishing like, oh geez. What would that have looked like back when I was working at the funeral? You have those targets to meet. Are there just some ad hoc ones that you offer? Just some random bonuses, maybe collectively, if people … like a team has done well during a busy period, or do you just keep it very by the book? We’ve laid out the plan, we follow the plan.
Nelson Thulin:
Yes. And gosh, that’s such a great question because that is in our very nature. Generally speaking, we’re caregivers before we’re business people and especially you look through the pandemic and you see what people went through. And I was with a company here not long ago that was in New York. Well, they still are in New York, but they just saw the absolute worst of it. And to look into their eyes, you could see like the shell shock still of just what they had to go through. And I know the ownership there is like we just, we got to demonstrate our heartfelt desire to do something for them. And I would never suggest anybody not doing that. I would suggest that dollars aren’t all is the fix for something like that. And to be more creative then let’s just throw some extra dollars and hopefully that makes up for it.
But going back to your original question, the first thing, what I always suggest to people is that by implementing this ICP program, I highly encourage you to eliminate all the other things, i.e., the arbitrary or historical, seasonal things that we do before that are tied nothing to more than a date on the calendar. We’re going to give out bonuses at Christmas time, or we’re going to automatically give you 3% raise on your anniversary date. Those types of merit increases do nothing for your business unless the people are growing. And it’s a simple understanding that we want you to grow, and we will reward you for your growth.
But how many times do you go into funeral homes and you see that maybe there’s a segment of the employee base that really probably couldn’t get a job in the current set of circumstances. If you came into a funeral home and said I can’t operate a computer system and I don’t really care to learn how to, if you were a candidate amongst three or four, of course, in today’s market, you might still get hired because it is so tight. But in all reality, if you came in fresh face, along with everybody else, and said, “I’m limited on those skills, you probably wouldn’t get hired.” So the same thing should be, I had a mentor tell me long, long ago, every day is a job interview. And you should always be looking to be the person that you put out to everybody else, I’ll work the hardest I can ever, I’ll do this, I’ll do that.
But it is human nature. People become complacent and 10 or 15 years in, maybe the drive isn’t there. With these incentive plans, because it is an annual discussion. It’s a sit-down, we’re saying, “Fred, here’s where we think you can be. And based on the things that you’ve shared with us, you think so too. Let’s help you get to that next level in your career. And not only are we going to support you in that effort, but we’re going to reward you once you achieve it.” I think that’s the ongoing conversation that there is no limits to where you can go in our company, as long as there are no limits to what you’re willing to invest of your own time and energy towards it.
Again, when you get back to the other ones there’s going to be some sentimental payouts. And you’d be surprised, we do employee satisfaction surveys, and it asks employees about a variety of different things that impact their work environment. And one, of course, is compensation and benefits. And so there are some standard questions that they do multiple-choice, but then there’s always a verbatim section where they can write in what they want. I can’t tell you how many times I’ve read where we’d just like to maybe have a pizza in on a busy day, or it would just be nice to know that I made a difference with a family with my embalming work or something like that.
They’re usually not looking for big payouts. They’re looking for small acknowledgments and a little bit of appreciation. And I’ll tell you, the sit down that you have in talking about the ICP can be equally as valuable as the ICP itself. To sit down with your boss and to him or her have a true interest in the betterment of your career and financially as well, that can be a tremendous thing for anybody to get that time and attention from the person who is their boss.
Robin Heppell:
For sure. This, I think this sounds great, especially for folks that haven’t had this in place and especially in the current climate of trying to retain, you want to retain your good staff. And they’re the ones that will look elsewhere. It’s the staff that you wouldn’t mind leaving, they’re the ones that are going to stick around, as you explained, because there probably may not be hireable elsewhere.
So I’ve listened so far. Now, what are the next steps? So they contact you. What does the startup process look like, and how quickly does it take to get going? And then when could they see it? And I’m guessing this last question, the return on the investment of this initiative is probably pretty quick, right? So if we wanted to start now with Heppell funeral home, what are the next steps?
Nelson Thulin:
Yes. So it is, everything you’re saying is spot on. So I meet with you, have a discovery call. I’d get some basic metrics about your company. And from that, I would create a templated program and then we would sit down and we would go through it. And we’d say, based on your revenues and everything else like that, we think that this is what you could support as far as an ICP program. And what it would require is a stretch goal of two extra calls per quarter, eight for the entire year. Again, we always stress doing the quarterly one. One, because you’re giving more frequent feedback to the person. If I’m talking to a person at the end of Q1 and give them some insight on how they can improve to get all of their bonuses for the rest of the year, well, one, you make life better for them and the possibility of generating all their bone own as money.
Also, it has a greater impact on the funeral home. If we’re making adjustments in April compared to December, it’s obvious you’re going to have a lot greater return in the program. So then we go through all that. As an owner, you’re obviously going to have the final say on everything and we go through a distribution list. If we have a pool that looks this size, do you want to take care of just funeral arrangers and directors? Do you want to include embalmers? Which we always try to not leave them out. But some people have expanded beyond to the rest of their staff, support staff, and things like that. Then we determine what are the metrics that we should use. What’s the behavior?
In fact, I usually tell owners, don’t worry about what they have to achieve. You tell me the behavior that you’d like to see and we’ll work out a metric for that. In some cases, it’s the rollout of a new program. Maybe you’re going to Institute a new point of sales system. And we’ll say, “By the end of the quarter, we’re going to put 40% of your bonus potential is tied to being proficient at that new point of sales system,” and that’s what we do.
So we typically don’t do quarter by quarter. In fact, I would discourage that except in those unique situations. Generally speaking, we set out what the plan is for the whole year. So that, like I said before, when we have that review at the end of the quarter, and we explain now it has impact for the rest of the year. Okay. If I start doing that and I see these results, I’ll pick up that extra bonus money as I go along.
So once we do that, and once the owner is completely confident of that, we’ll even do behind the scenes. If they’re little bit reluctant to just jump in and do this thing, I’ll go back and look at historical data and recreate it. So if we had started this, Rob, last year at this time, here’s what the results would’ve been. And this is without the benefit of knowing people could have said, well, if I improve upon this, or if I work a little bit harder at that, what the company results would be. But we could show you what the typical payout would be, because you can imagine number of employees there’s averaging going in, as far as somebody will get all of their bonuses, some won’t get all of their bonuses. So even when we set that pool, the likelihood of paying it out completely is pretty slim just because you’ve got so many component parts between multiple employees, and heaven help us if you did payout.
I mean, you’d be doing pretty well if you were doing so well that you could pay out everybody’s bonus. That would be the trifecta, I guess. Then once there’s all that confidence and all that set in the mind of the owner, then we roll out the program for you. It’s not just here you go, do your best and see you at the finish line. We have the ability to say and demonstrate things for the staff that it just wouldn’t be conveyed coming from the owner. I can impress upon everybody that this isn’t your normal compensation that was established when you came to work here, this is a sharing of the benefits of growth and development. And the owner realizes that they can’t get from here to there without all of your help and all of your collective help.
That means everybody’s got to do their part. And for that, they’re going to share in some of that excess benefits that we drive through the growth of this business, blah, blah, blah. So I can say those things on behalf of an owner that would seem a little contrived coming from the owner. And then we can answer the questions. We’ve done this so many times now I don’t think there’s probably a question that somebody can ask me that I can’t answer. Whereas an owner rolling out for the first time, last thing you want to do is be in front of a group of people and they throw you a curveball. And now you’re stutter-stepping as to, “I don’t know,” and then that doubt creates doubt within the whole program. So again, really important that we provide the rollout help.
And then again, we do the quarterly reviews. And to your point, when would you see success? You’ll see it within the first quarter. This is an extreme example, but it’s one that demonstrated to me that you can set goals. You can let people understand what they are, and they will respond. But I had a client down south, they were doing really well and still are with regards to their case-mix between burial and cremation. But the reality is that there was an ever-increasing creep on the cremation. And I said someday down the line, you’re going to be like the rest of us where it’s 50/50 or even worse. I think we want to start getting that into the minds of your arrangers, how to focus in on cremation a little bit more than they do burial.
So at the time when I brought that up, we were I think 100% bonus, 25% of it was towards their burial averages. 25% of it was towards their cremation averages, and the rest was on other criteria. So I said, I tell you what. Let’s do this, let’s change 25% to 20% on the burial and let’s try 25% to 30% on the cremation. So now they see that there’s a significant difference in the return for them if they start really working on their sales averages for cremation. The next quarter, they averaged a $900 increase in sales averages for cremation. And we absolutely tied the link. Look, everybody. This is what it was, this is what it’s going to be this year. These are the areas that … and we said, here’s the areas that you can work upon.
It’s the earns, it’s the keepsakes, it’s talking to a direct cremation family about the possibility of having not a full-blown memorial service. But how about if you, he was a veteran, we organize military honors. I’ve done that for people in the street outside their home. They had a direct cremation, but they had military honors, they were eligible. And a lot of people don’t realize that, but they’ll go wherever you request them. Big thing there, let the police know. But Yes, I’ve actually had that right out in the street in front of somebody’s home. And I’ll tell you what, probably was more meaningful them than it was at the cemetery because their whole neighborhood participated or realized they were recognizing the patriotism of their dad or mom or whoever was serving.
But now people are starting to think, “Oh, I could do that.” I mean, I know I’m not meeting a veteran family every single time, but that’s a good idea. The next time I have a direct cremation for somebody that has a military background, I’ll let them know. And we’re going to have to have a couple hundred dollars for the time and energy to organize it, but you’ll find people that don’t strap them at all to have a service like that or anything.
I mean, there’s a variety of things that can be added to the process of cremation. Years ago, I wrote an article about burial equivalent cremation that if we thought about cremation in the same mindset that we think about burial, for instance, we know going into a burial arrangement, that there’s a very good likelihood somebody could have already prepurchased their vault at the cemetery.
That could be a mausoleum waiting for them, whatever that might be. But we never once think about that we’re not going to at least present a vault. Yes, we might get turned down or have a reason why they’re not going to purchase it, but you still, that’s going to be part of your presentation. But so oftentimes we don’t think that way with regards to urns or urn vaults or some additional remembrance thing, something that carries along a significance of a life lived that we could present to a family that if they don’t know about it they need the funeral professional to make them aware of it. Let them choose, but I’ll tell you what, if they go into that there’s going to be some extra sales. And that might just be enough to make the $75 average they’re missing get to that point where now they get that bonus at the end of the quarter.
So people start thinking in terms of that, they start thinking about their ability as a semi-owner, the owner of their own experience at the funeral home, that they can do something with it, invest their time and energy, their creativity to generate more income for themselves. And that is at the heart of this whole thing is to create an ownership mentality within the team that they’re actively looking for opportunities to improve and knowing that they’re going to be rewarded at the back end of it. And that’s what business is all about, doing a better job to be rewarded in the end because people appreciate your service or merchandise or whatever that might be.
Robin Heppell:
For sure. Now, hey, Nelson, that was just a great amount of information. And I’ve got a couple questions before we go. But one thing that just popped into my head and thinking of the other service offerings that Johnson provides, does this ever help, because you said, because they take ownership with themselves within the funeral home. From a succession planning or passing the business off to a key employee, and maybe the ICP is just maybe too new, but in those transitions, having something like this in place where, because now the employee who could become the potential owner now really understands the metrics of a successful funeral home. Have you seen that yet? Or I’m guessing that there is obviously some congruency there?
Nelson Thulin:
Well, I think what it would relate to certainly is I’ve actually seen opportunities to buy funeral homes go by the boards because there was not going to be an accompanying staff. You’ll have somebody that’s maybe in their seventies and they’ve been working alongside their staff who might be in their sixties and seventies and you come to a big transition like that. And some people are like, “Yes, I’m checking out with the boss. I don’t need to start over.” But so you see somebody that’s looking at it and say, “Okay, great. I can buy a business, but there’s nobody to work it.”
And the importance of the whole labor pool issue is easily the biggest issue out there right now. But think of it this way, and you’re right, I don’t think we’ve seen ICPs in the way that we do them have enough historical background to say that it really played into a decision like that.
But I would say if you were out there looking and considering, and you saw a track record where a current owner could say, “Here’s what my team has been able to accomplish in the last 5, 6, 7 years that we’ve been doing this, is every year we strive for a stretch goal. And here’s our track record. In the first couple of years we paid out half the time, but now we’re at the point where we pay out three out of four quarters annually and that’s built on a stretch goal over the stretch goal from the previous year. So I have a workforce here that can demonstrate repeated ability to build this business over and over and over again.”
And you would have that documentation of all these previous re-records of ICPs where they could see real easy, oh Yes, three out of four quarters, three out of four quarters, all four quarters. I think, and I haven’t really thought about it until you just brought it up. But I think that potentially could be a great documentation to show anybody if you’re trying to establish what the value of this business is going forward. And you have the ability to say here’s a team that can consistently perform for you. Gosh, I can’t imagine anything more powerful in today’s world than to be able to demonstrate that.
Robin Heppell:
Yes, Yes. For sure. One last question. Oh, maybe there are two. Anyone who’s engaged you with this. Have they ever come back and said, “Hey, Nelson, this didn’t work.” The success rate of putting this into place, I would guess that unless it’s particularly the individuals at the funeral home, or maybe the leadership at the funeral home, but overall I’m thinking this is a no-brainer for any company to do.
Nelson Thulin:
Yes. I can tell you, there have been two times that I know that it’s failed and this is going to sound a little pointedly stated, but in both those times, the owner implemented it on their own. For whatever reason that was whether or not they just timing, they just wanted to do it at the next meeting or something, or maybe they were worried about having that outsider perspective, that they didn’t want somebody knowing that, well, I got somebody else’s advice. I just came up with this.
I don’t know what the reason was, but twice that has happened where they ventured off without having our involvement. And those are the two times it failed. And like I said, it comes a little bit because of the presentation that we can do. We can do it in a way that’s not only forceful, but tactful and we can present it in a way that usually an owner just, you just can’t. You can’t say the things that you want to say without sounding a little self-serving.
And then the critical piece of this all goes back to the very first comment that you made is you got something and you didn’t know why, or you didn’t know why you didn’t get it and things like that. That quarterly review where we give people the information that allows them to improve their position, to do better. Now, they may not always choose to do better, but they aren’t walking away thinking, “Why didn’t I get my full amount? And why did Jeff and I didn’t?” They’re going to understand.
And again, because we’re always talking about promoting behaviors that improve results, most people can see it for themselves. I mean, they’ll see that Jeff is doing something that I don’t do. I don’t either feel comfortable about it, or I just don’t want to do it, but they’ll see it because they’ll know that Jeff is getting his full amount and I’m not.
And it’s all of that reinforcement, but again, it comes with encouragement and a willing to support and provide the training that if the employee willing to take it in, learn. And again, it’s a developmental program so we’re always talking about improvement. That’s I think the key to the success is driving that, and it did not just become a quarterly ritual of giving out checks or not. That it really has a purpose of driving results, and not just hardcore results, we want to make more money, but really improving ourselves as professionals and our skills as arrangers and taking care of families and improving that experience. So I think that’s the success behind it. And like I said, it’s had a pretty good track record as long as we get involved.
Robin Heppell:
Perfect. Well, hey, Nelson, this has been amazing. And again, I wish this was around a decade or two ago, but Yes. I’d just like to thank you for sharing today. If anyone’s interested to get started, what should they do? Just contact you?
Nelson Thulin:
Yes. You can go to the Johnson Consulting website and there are places where you can simply mark I’m interested in ICPs or give us a call. You can call me, you can call the main office and ask for me and we’ll certainly be there to help you.
Robin Heppell:
Perfect. Hey, well, thanks for this, Nelson.
Nelson Thulin:
Well, thank you. This is really a nice break from the day, so I appreciate it.
Robin Heppell:
You bet. And I’d also like to thank our listeners. Thank you for spending your time with us today. It’s our goal to share our experiences, insights in the hope that it may help other funeral professionals like you improve their funeral enterprise. Make sure you check back soon for another episode of the Funeral X podcast. Until the next episode, this has been Nelson Thulin and Robin Heppell.
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