Organizations in which peers hold one another accountable perform better than those that rely on management oversight alone. Jospeh Grenny (The Peer Principle) and Patrick Lencioni’s (The Five Dysfunctions of a Team) make similar points – when we share the responsibility of holding people accountable we achieve greater results.
This conclusion comes as no surprise to those we honor this Memorial Day. Veterans of World War II and other conflicts recount numerous anecdotes of soldiers who fought because the people in their unit depended on them. Sure, they fought because of personal danger, and the military may argue that soldiers must follow orders, but the greatest generation was so great precisely because they held themselves and one another accountable.
Sounds great in theory but best to start with the goals; accountability comes second. Success in Business and on the Battlefield demands:
Clear Objectives – How many times has your organization operated under the “Ready, Fire, Aim” plan? Without clearly aligning people in the business you are guaranteed to fail. Military leaders don’t order their troops to “go” without first pointing them in the desired direction.
Coordinated Action – Clear lines of responsibility are as important as shared purposes. If our people don’t know what is expected of them, we should be able to predict lackluster outcomes. We can’t expect galvanized (or passionate) action if people flail about without a sense of how their efforts fit together.
Recognition of the Consequences of Failure – Battlefields provide an inherent urgency and an amazing clarity of action. In business our success/failure has little to do with “loss of life” yet we still benefit from speed. Without speed we miss opportunities that our competitors exploit. The price of failure in business will never rival that in battle but having a deadline (a threat, if you will) helps all of us focus on important aspects.
The pivot point is that companies must first be aligned around common goals. Without a common foundation, shared accountability becomes an exercise in finger pointing… hope that thing’s not loaded!
If you are a US taxpayer and you file late you get penalized with additional fees (in the form of interest). If you file really late, you may go to court. And if you make heinous mistakes you may end up in jail.
If, on the other hand, the IRS is late in issuing a refund, the government invokes a grace period of 45 days, which they call putting an account in “suspense”. The only suspense here is in wondering “will I ever get my money back?” Who pays? You guessed it, the taxpayer by providing the government with an interest free loan for 45 days. No, this “drama” isn’t nearly as suspenseful as an Alfred Hitchcock movie… although we can draw some interesting parallels to Psycho.
The pivot point is that to deliver great customer service (and not just claim to want to), treat customers as you would want to be treated. No one at the IRS wants to receive their refund late or be penalized… guaranteed, or your money back!
Silos get a bad reputation in customer service; for good reason. Organizational barriers prevent information flow among work groups, customers are asked the same questions over and over again, and blame tends to flow faster than solutions. But one silo, aligned around a customer for a customer, can actually improve the customer experience and improve business results at the same time.
Create Silos:
To Benefit the Customer, not the Company – Protect customers from bad policies. My favorite recent example (involving a lost dog) shows what happens when company policies meet the letter of a policy but fail to account for the simplest of courtesies. When (if?) Delta finds the dog, poor Paco should get a first class return trip with its owner.
To Treat Customers as the ONLY Customer – Companies are powerful entities, and once they have our money, they become more so. We want to create experiences where the entire strength of the company is aligned around a single customer at a single point in time. When all the resources of the company are focused on satisfying a customer (even if there isn’t a procedure, budget, approval, etc.) we create memorable and unique experiences that lead to a genuine sense of loyalty.
Silos, often erected to increase operational efficiencies, can have detrimental effects on your customers. The Pivot Point? Align your company around the needs of a customer to destroy harmful silos and replace them with a silo that enhances the customer experience and your business simultaneously.
The Wall Street Journal, in its April 19th edition, reports that “Retailers Try on New Sales Tactics”. The new tactic? Companies like JC Penney, Macy’s, and Home Depot plan to focus on customer service. (Gasp.) My guess, this new strategy could be downright revolutionary.
For starters, this ought not to be called news. But since the WSJ found it noteworthy, let’s identify a couple of salient points.
Customer service is the best way to drive top line growth – JC Penney
Assisting customers assists the company – Home Depot is training cashiers to ask if customers have found what they sought
It shouldn’t surprise us that customer service helps companies grow. What is important in the article is that customer service must be a constant focus, not a one-time program. To achieve meaningful and lasting results, you and your employees must develop customer service muscle memory so that the first question we ask is “how can we help our customers get value?” Companies like these may get short term results by reinvigorating their focus on service. Mr. Spahr, at Home Depot gets it right when he indicates that strong relationships draw customers back into their stores.
The pivot point is that customer service is not a program, per se, but a culture, a way of doing business, and a commitment to social responsibility. Cultures must be nurtured lest they gain an unintended life of their own.
I read a good Harvard Business Review blog post that discussed when customer loyalty can be a bad. The article is worth perusing, even though the authors have missed the point of loyalty. Customer loyalty is never bad.
The argument the authors ought to start with relates to unprofitable customers. Mr. Keiningham and Ms. Aksoy write:
“If typically most loyal customers in a firm aren’t profitable, how exactly does a customer loyalty strategy ever generate a positive return on investment? Instead asking whether you have enough loyal customers in your customer base, you need to ask yourself three more complex questions: 1) which loyal customers are good for the business, 2) how do we hang onto them, and 3) how do we get more customers like them.”
“Unprofitable loyal customers tend to be loyal for one of two reasons: 1) they are driven by unprofitable pricing or exchange policies, or 2) they demand an excessive amount of service that they are not willing to pay fairly to receive.”
If customer loyalty stems from #1, your company has a straightforward sales problem. If loyalty comes from #2 then your company should stick to its guns and deliver a level of service that is profitable. And if your company encounters #1 or #2 consistently you can be sure you have either an unviable business model or a management team that requires a wake-up call.
Mr. Keiningham and Ms. Aksoy definitely get one point right – some customers can damage your business. (In fairness, the reverse is also true well – some businesses damage customers!)
The pivot point: don’t start by asking which loyal customers are profitable; start by understanding which customers are profitable. Then either make profitable customers loyal or make loyal customers profitable.
