Too many companies can’t tell the difference between good profits and bad. The consequences are disastrous. Bad profits choke off a company’s best opportunities for true, lasting growth. They blacken its reputation and make it vulnerable to competitors.

By “bad profits” we mean profits earned at the expense of customer relationships. Whenever a customer feels mistreated, those profits are bad. Bad profits come from unfair or misleading pricing, saving money by delivering a poor customer experience, or extracting value from customers rather than creating value. At many firms, more than 30% of customers fall under the category of bad profits.

Good profits are dramatically different. A company earns good profits when it so delights its customers that they not only willingly come back for more, but they also tell others to do business with the company. Satisfied customers become, in effect, part of the company’s marketing department. They become promoters.

A simple technique can help you distinguish good profits from bad. Ask your customers to answer what we call “the ultimate question”: On a scale from zero to 10, how likely is it that you would recommend this company to a friend or a colleague? The responses will help you tally a metric known as Net Promoter® Score (NPSSM). NPS has been shown to correlate well not only with customer referrals and repurchases, but also with companies’ growth rates.

Customer responses cluster into three groups. The first group-customers who give the company a nine or 10-we call promoters. Customers in the second group, which rates the company at seven or eight, are “passively satisfied.” Detractors, with ratings from zero to six, make up the third group. A company’s NPS is simply the percentage of promoters minus the percentage of detractors.

Bain has found that companies with the leading NPS in an industry usually enjoy superior growth-typically, more than 2.5 times the average growth rate of the competition.

How can a company raise its NPS? First, by designing the right propositions for the right customers. A vital step toward clarifying your priorities is to quantify the average lifetime value of your company’s promoters and detractors, factoring in margins, annual spend, cost efficiency, and referrals. Another step that will help is to map your customers onto the grid illustrated in Figure 1.

High-profit promoters, in the upper right, love doing business with you. These customers should be your top long-term priority for strategic investment and innovation. Your entire organization should focus on delivering flawlessly to them. Too often, however, customers in this sector are taken for granted (no squeaky wheels here). Inadvertently, companies may be milking profitable promoters to fund solutions for less-profitable customers.

In the 1980s, American Express took the healthy profits from its core travel-card business and financed an expansion into financial services. Within the card division, margins from high-volume customers subsidized the acquisition of new customers outside the core business. Predictably, American Express’s growth and profits tailed off…until it revitalized compelling propositions for core customers. For example, the company transformed its Membership Miles program into Membership Rewards, one of the industry’s most generous rewards programs, and created the Rewards Plus Gold card, now one of its most popular products.

High-profit detractors, in the upper left corner, should be the second priority. They don’t like doing business with you and are telling others. They will likely defect at the first opportunity.

A mobile-phone provider found that many accounts in this sector were locked into long-term contracts at fixed prices. When these prices became uncompetitive, the customers were furious. The fix was easy: Offer more favorable terms in advance of renewal. That cost money, but holding angry customers hostage would’ve cost even more.

Moving more customers into the upper right sector should be your third priority. Begin by looking for ways to

encourage low-profit promoters to do more business with you. Amazon.com, for example, began to use personal
recommendations and incentives such as premium shipping to do this. You’ll also have to figure out what would win over the passives, and then calculate whether such investments make sense or would merely “steal” resources away from your core.

Leading companies like GE, Intuit, and American Express are now deploying NPS and discovering how versatile it is. Like any good metric, NPS allows experimentation and accelerates learning. It helps you understand your core customers and design propositions that captivate them-and discover opportunities to deliver a great customer experience at every touchpoint. By producing NPS data regularly, you’ll institutionalize a cultural shift, making customer metrics every bit as auditable and practical as financial metrics such as profit and return on equity. You’ll develop your capability to keep turning customers into advocates that lead your company to lasting growth. And it all starts by asking just one question.

I’ll tell you the truth. Barack Obama isn’t only fooling the Jews. He’s fooling all the people of America. Right now, people are determined to prove they can vote for a Black person because they were told they’re racists all their lives. White men are walking around feeling guilty thinking if they don’t vote for Barack Obama, they’re racists.

But as far as the Jews are concerned, they are still wedded to the Democratic party, when the Democratic party is not interested in Israel. The Democratic party has voted very often against Israel on major issues. The Republican party is determined to help Israel almost more than the Jews are. Even the Hassidic Jews. I don’t care how religious you are. They’re not as willing to fight for Israel as the Evangelical Goyim. But since the days of Franklin D. Roosevelt, the Jews have been told that the Republicans are for big business and not for the underdog. The Jews feel the Democrats are helping the struggling people. And they still believe it. The Jews are more willing to feel guilty for not helping a poor person than anybody else is. Because a Jew has to feel that he’s always compassionate and always helping the underdog.

According to Palestro, union reps do not commonly report the infractions of their fellow officers. “I wrestled with it for a while because I’m a delegate and we don’t do things like this,” he told the Daily News. In the end he made three anonymous phone calls reporting corruption within his precinct, but the log of his calls somehow made its way into the vents of his locker at the stationhouse! “[Seda] told everybody I was a ‘f—— rat,’” he said, adding that the union has also reprimanded him. So far no action has been taken against the accused lieutenant.

Palestro’s allegations follow a study that revealed widespread and deeply ingrained corruption regarding how the NYPD’s crime statistics are obtained, as well as whistleblowing by several other members of the force.

The massive data theft from the tax authority’s computer system has raised concerns about cybersecurity in the Baltic country.

It has also embarrassed politicians and other public officials whose income and wealth – often many times the national average – are being exposed to the public at a time when Latvia is undergoing painful budget cutbacks to rebound from a severe recession.

News of the electronic security breach surfaced last week, when an organization calling itself the People’s Army of the Fourth Awakening told Latvian TV it had downloaded millions of classified documents over several months from the revenue service’s Web site.

One of the group’s members, who uses the name “Neo” - apparently in reference to the hero of the popular “Matrix” films – has been making some of the documents available on the Internet.

On Wednesday “Neo” published salaries of members of Latvia’s police force and, in comments on a Twitter account, said “I call on the police union to analyze the data and determine whether the salary reform is fair and to continue the fight against crime.”

Earlier this week “Neo” released data showing that the CEO of Riga’s heating company, Aris Zigurs, paid himself a 16,000 lat ($32,000) bonus last year – a hefty sum for a city-owned utility, especially at a time when many municipal workers have had their salaries slashed. Zigurs confirmed to Latvian media the data was accurate.

It is unclear where “Neo” and the other organization members – if they exist – are located, though “Neo” has indicated that he or she is currently abroad. Even “Neo’s” gender remains a mystery, though local media believe it is a man.

“Who is Neo?” asked a Twitter entry on Wednesday. “Behind Neo’s mask is something more than flesh, behind this mask is an idea that hopefully no one in power can stop.”

While some government officials have questioned “Neo’s” motives, many Latvians are supportive.

“There is very little trust in Latvia’s institutions right now, so anyone who can expose the system is going to be a hero,” said Juris Kaza, a political commentator and blogger.

Latvia’s economy is the weakest in the European Union, with unemployment reaching 23 percent. It is currently carrying out painful social reforms, and many public employees have had their salaries slashed up to 50 percent.

History of Latvia – cyber whistleblower shocks Latvians

Top government officials earn approximately 2,000 lats ($4,000) a month and in some cases more, while teachers have seen their monthly salaries slashed by approximately one-third over the past year to some 300 lats ($600).

Discontent has soared, making it possible for cyber-activists such as “Neo” to win people’s admiration.

“Judging by the overall reaction, it seems that Latvians are getting some new heroes – a sort of Robin Hood,” Maris Kucinskis, the head of parliament’s national security council, told Latvian Radio on Tuesday.

The nation’s security council discussed the breach and expressed concern that only 50 percent of the country’s 175 state-run data systems have security oversight. President Valdis Zatlers called for immediate action to install proper security on all systems.

Computer experts concluded that the breach did not constitute a cyber-attack and was the result of poorly developed software and systems management.

Police, meanwhile, are searching for “Neo” and other suspects behind the data theft. Police chief Valdis Voins said Latvia has turned to other countries for assistance in the investigation.

“One thing is clear now – we’re only at the beginning of a long investigation,” police spokeswoman Ieva Reksna said.

Canadian Whistleblower Richard Colvin will get paid by the federal government for the diplomat’s legal fees. Richard Colvin is the Canadian who blew the whistle on alleged Afghan prisoner abuse.

At the Department of Foreign Affairs and International Trade an official said that two invoices from Mr. Colvin’s previous lawyer, in the amount of $20,000, are being paid and payment for a third invoice, which was submitted in December, has been met with approval.

Additional funds have also been set aside to a maximum of $50,000, to pay potential and additional legal expenses, according to Joffre LeBlanc.

In a letter sent to the Military Police Complaints Commission, Mr. Colvin’s Toronto attorney, Owen Rees, said his client believed the Canadian government was refusing to pay his legal bills as payback for Mr. Colvin’s revelations before a special House of Commons committee in the fall.

Mr. Rees said the government was basically not paying Mr. Colvin’s legal fees after his testimony.

Mr. Colvin, currently an intelligence officer at the Canadian embassy in Washington, revealed to the Canada committee that several senior government officials were aware that Canadian Forces in Afghanistan were handing over detainees to face likely torture by Afghani authorities in 2006 – 2007.

His allegations rocked the government and led to furious denials from generals, former generals and cabinet ministers, including Defence Minister Peter MacKay, who questioned Mr. Colvin’s credibility.

Conservative MPs on the Afghan committee made claims that Mr. Colvin had been a victim of fraud by Taliban propaganda.

Liberal defence critic Ujjal Dosanjh says it is ridiculous that Mr. Colvin has had to fight so hard to retain independent legal representation, and he doesn’t believe the department was merely slow to respond to the request for money.

“The Harper Conservatives did not hesitate to pay former prime minister Brian Mulroney’s legal fees,” said Mr. Dosanjh. “Taxpayers paid over $2-million to cover Mr. Mulroney’s legal costs at the inquiry into his dealings with [German-Canadian businessman] Karlheinz Schreiber.”

A spokesman for the Prime Minister’s Office suggested politics played no role in either case. “In both cases, the decision to reimburse legal fees was taken at the departmental level,” Andrew MacDougall said.

At this time, two of the three opposition parties claim they’ve heard the government will not restart the committee on Afghanistan once Canadian Parliament returns from its forced hiatus. The committee is where the most attrocious revelations about the treatment of Afghan prisoners have been revealed.

Prime Minister Harper’s decision to prorogue Parliament dissolved all committees. It would take the unanimity from all parties in the House of Commons to re-start the opposition-dominated committee.

However a spokesman for the Prime Minister’s Office said opposition parties are making a fuss about nothing.

“Afghanistan remains a public policy priority, and the special committee on Afghanistan will be reconstituted once the new session begins,” deputy press secretary Andrew MacDougall said Wednesday.

New Democratic MP Paul Dewar was cynical about this. “They shut down Parliament,” said Mr. Dewar, the party’s foreign affairs critic. “I don’t put anything past them. They could kill a committee. That’s nothing.”

The Liberal Party is also critical, but Bloc Québécois defence critic Claude Bachand seemed prepared to give the Tories the benefit of the doubt. “I don’t think they can stop the committee,” said Mr. Bachand.

Demands made by opposition committee members to see uncensored documentation in December created a standoff with the Conservative government.

The Liberals introduced a motion demanding that the records be put forward; failing that, Mr. MacKay could be called before the “bar” in Parliament to respond to questions, and could even be removed from his seat if found in contempt.

General Rick Hillier – Colvin Testimony on Detainee Torture Ludicrous

A whistleblower complaint got a little messy Tuesday morning as lawyers argued about whether Manitobans should pay higher power rates while things get sorted out.

Manitoba Hydro did ask the Public Utilities Board for a 2.9 per cent rate hike effective April 1. But it’s clear the “mega-hearing” needed to determine whether Hydro deserves a rate increase will take months longer than that, especially if the whistleblower’s concerns over Hydro’s financial and power supply risks spark an entirely separate hearing.

In the meantime, the PUB is considering whether Hydro needs more money from homeowners now – perhaps a 2.9 per cent hike, or something less than that.

But some intervenors at Tuesday’s hearing said Hydro shouldn’t be rewarded for stalling the regulatory process and releasing only a trickle of documents. The province’s big corporate power users said giving Hydro a rate hike without a real hearing would set an “injurious and unprincipled precedent.”

Whistleblower asks Manitoba Hydro about $160 million

Hydro argued it needed modest and regular rate hikes to maintain its good financial picture.

Meanwhile, at the downtown courthouse, Hydro began an appeal to force the whistleblower to hand over her reports to KPMG, another consulting firm Hydro has hired to test the whistleblower’s findings that Hydro could face bankruptcy and blackouts.

Yet another hearing is likely later this week to discuss a ban on publication.

Time magazine’s named her Person of the Year in 2002 along with two other female whistleblowers. She is the author of Power Failure: The Inside Story of the Collapse of Enron. Her name is Sherron Watkins.

Watkins will discuss “The Lessons of Enron: The Importance of Ethical Leadership.”

Watkins is the former vice president of Enron Corporation who warned CEO Ken Lay in August 2001 about accounting problems within the company, and told him that Enron “might implode in a wave of accounting scandals.” Later she testified before Congressional Committees from the House and Senate.

Before its bankruptcy in late 2001, Enron was one of the world’s leading electricity, natural gas, pulp and paper, and communications companies. At the end of 2001 it was revealed that its reported financial condition was sustained substantially by systematic accounting fraud. The scandal also brought into question the accounting practices of many U.S. corporations and was a factor in the creation of the Sarbanes-Oxley Act of 2002.

Watkins joined Enron in late 1993, initially working for Andrew Fastow, managing Enron’s $1 billion-plus portfolio of energy-related investments. She held the portfolio management position for more than three years, transferring at the start of 1997 to Enron’s international group focusing primarily on mergers and acquisitions of energy assets around the world. In early 2000, Watkins transferred into Enron’s broadband unit where she worked on various projects until late June of 2001 when she went back to work for Fastow in his new area of responsibility over the mergers and acquisitions group of Enron. She resigned from Enron in November 2002.

The lecture, which is free and open to the public, is part of the Richard P. Gifford Lecture Series sponsored by Lynchburg College School of Business and Economics. A reception and book signing will follow. For more information, contact Paul Kelbaugh at 434-544-8417.

Sherron Watkins and Ethics In The Workplace

(video)

]]> http://sandyhutchenswhistleblower.com/2010/02/08/whistleblower-to-speak-on-enron-at-lynchburg-college/feed/ 0 http://sandyhutchenswhistleblower.com/2010/01/18/whistle-blowing-step-by-step/ http://sandyhutchenswhistleblower.com/2010/01/18/whistle-blowing-step-by-step/#comments Mon, 18 Jan 2010 22:10:08 +0000 admin http://sandyhutchenswhistleblower.com/?p=114 We at Sandy Hutchens Whistle Blower are pleased to show you this video that goes through some of the step one should take before whistle blowing.

]]> http://sandyhutchenswhistleblower.com/2010/01/18/whistle-blowing-step-by-step/feed/ 0 http://sandyhutchenswhistleblower.com/2009/12/21/pfizer-whistleblower-receives-honour/ http://sandyhutchenswhistleblower.com/2009/12/21/pfizer-whistleblower-receives-honour/#comments Mon, 21 Dec 2009 21:18:26 +0000 admin http://sandyhutchenswhistleblower.com/?p=111 This whistleblower lodged a complaint which led to the largest criminal fine in American history

An ethics think tank has named John Kopchinski, a Pfizer Inc. whistleblower, as 2009’s most influential person in business ethics.

Ethisphere, which focuses on business ethics, corporate social responsibility, anti-corruption and sustainability, ranked Kopchinski first on its list of the 100 most influential people in business ethics, according to its Web site.

According to the organization, “Kopchinski blew the whistle on Pfizer’s marketing activity and received $51.1 million of the penalty that Pfizer paid for illegally marketing some of its drugs. Four other whistleblowers received some of the award as well, but Kopchinski earned the largest piece of the pie for his role. Officially turned whistleblowing into big business.”

As a former sales representative for Pfizer, Kopchinski exposed the company’s illegal sales and marketing campaign for the prescription painkiller Bextra for off-label uses and in doses that endangered patients’ health and lives.

Acording to Phillips & Cohen LLP of Washington, D.C., which represented Kopchinski, the Food & Drug Administration approved Bextra to treat arthritis as well as menstrual pain in very limited doses. Phillips & Cohen specializes in representing whistleblowers in cases involving fraud against the government, tax matters and securities violations.

Kopchinski alleged in his lawsuit – which the government joined – that Pfizer promoted Bextra for uses and in doses that far exceeded what the FDA had approved, putting patients at risk for heart attack, stroke and pulmonary embolism (blood clot in the lung). Bextra was withdrawn from the market in 2005.

In a statement Friday, Pfizer reiterated its denial of the civil allegations set forth in the multiple complaints, but acknowledged “certain improper promotional conduct related to Zyvox and the Bextra conduct involved in the plea agreement.”

Pfizer paid $1.8 billion in September to the government to settle Kopchinski’s lawsuit and a related criminal charge. The company settled four other whistleblower lawsuits at the same time, bringing the total settlement to $2.3 billion. It was the largest health care fraud settlement ever and the largest criminal fine ever imposed in the U.S.

Pfizer Whistle Blower

]]> http://sandyhutchenswhistleblower.com/2009/12/21/pfizer-whistleblower-receives-honour/feed/ 0 http://sandyhutchenswhistleblower.com/2009/12/16/whistleblower-website-now-online/ http://sandyhutchenswhistleblower.com/2009/12/16/whistleblower-website-now-online/#comments Wed, 16 Dec 2009 20:04:26 +0000 admin http://sandyhutchenswhistleblower.com/?p=95 Sandy Hutchens: Whistleblower website will be used to report on bribes and kickbacks, embezzlement, falsification or destruction of documents and improper use of city property.

The code of ethics for city councillors and contractors should be given more clout, a report recommended.

Contractors that breach the code should be banned from bidding on municipal work for five to 10 years. The ban should extend to the businesspeople running the company, and not only the company, it adds.

The report, by Pierre Bernier, a professor at the École nationale d’administration publique, and retired law professor Jacques Boucher, was distributed at a city council meeting last night.

The experts also call on the city to extend the definition of conflict of interest for a councillor to include real or perceived benefits to members of a councillor’s political staff, and not only members of a councillor’s family. They also recommend the city urge the Quebec government to pass legislation providing for sanctions against councillors who breach the ethics code during a period of time after they leave office.

Also at last night’s council meeting, a member of the Montreal city administration declared a moratorium on development on Mount Royal.

The councillor, Richard Bergeron, is leader of the opposition Projet Montréal party, but he’s also responsible for urban planning on the powerful city executive committee.

“Consider us in a moratorium period,” Bergeron said of two controversial residential projects, one for townhouses and condos on the former grounds of Marianopolis College on the mountain’s southern flank on Côte des Neiges Rd., and the other for condos in a former convent on the northern slope in Outremont.

Bergeron announced the freeze in response to a question by a member of a residents’ group fighting the condo project planned for the former convent of the Sœurs des Saints Noms de Jésus et de Marie at 1420 Mount Royal Blvd. in Outremont.

Mayor Gérald Tremblay appointed Bergeron and another member of the opposition, Vision Montreal councillor Lyn Thériault, to the executive committee after the new council was sworn into office last month, to shake things up at city hall in the wake of a series of corruption and conflict-of-interest scandals.

The whistleblower hotline is at 1-866-232-8803, while the website is at www.ethiqueverificateurmtl.ca

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