Tag Archives: Shareholders

Suffering from Organizational ADD?

Posted on 15 August 2011 by | 2 Comments

Ambition is great.  Having it can help people set lofty goals which they might not otherwise achieve.  As NASA winds down the space shuttle program the world loses the urgency of Kennedy’s commitment to exploration and seemingly insurmountable goals.  That such a journey succeeded is not so much a testament to the audacious goal as it is to the single-minded focus of its attainment.

Do we have the focus required to achieve our business goals?  Can the people in our organizations depend on us to execute on a sharp vision of future, or, like Dug in Disney’s “Up” are we easily distracted?  Are we tempted to try to do everything at once?  Organizational ADD benefits no one; not customers, not employees, and not shareholders.

  • Employees suffer because each day brings a confusing array of new #1 priorities.  Without a clear and common objective we lose their engagement, loyalty and dedication.
  • Customers suffer because they lose faith in our ability to do what we say.  We lose their trust.
  • Shareholders suffer because our customers seek more dependable vendors/suppliers.  We lose their investment as we lose market capitalization.

What to do?

Chose a few good ideas and commit to doing them (the secret to accomplishing more).  Commit equally to not be pulled astray by flavor-of-the-month ideas.  The pivot point is that focus is the partner of ambition while squirrels are the enemy.

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Posted in Customer Service, Employee Engagement

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Aligning your Business to Customers: Pillar 4 – Leadership

Posted on 1 August 2011 by | 3 Comments

The fourth and final pillar that helps companies align to customers is leadership.  Leadership is the beginning or the end of customer service just as it is the beginning and end of all victories (or losses).

  • Culture – What are we and how do we behave when no one is watching over our backs?  Start-ups in particular have the ability to set a purposeful course with their companies.  Companies that value customers holistically (i.e. those that value long-term relationships over short-term financial transactions) set the tone.  They ensure that expectations can be met before a sale is made and they make the customer experience a journey that encompasses the entire brand.
  • Focus – Can our people depend on us to execute on a sharp vision of future, or are we tempted to try to do everything at once?  Organizational ADD benefits no one; not customers, not employees, and not shareholders.
  • Honesty/Integrity – Self-evident?  Hope so.  Fact is, words don’t carry same weight/impact that actions do.  Regardless of whether you think personal conduct is relevant to professional capabilities, our people look to leaders.  When leaders fail, organizations slide down the slippery slope to failure also.
  • Transparency – Transparency is a key element in trust.  The more we disclose to employees, the less we hide and the more authentic the conversations become.  For those uncomfortable with the process, read Jack Stack’s book, The Great Game of Business.
  • Outcome Orientation – Want people to give their best each day?  Ask them to deliver results and don’t dictate the method.  People bring different skills to work each day.  When we give them latitude to use those skills they feel better, are more willing to develop and contribute new skills, and add an element of innovation throughout each day.  Take the opposite tack and leave employees with little discretion and you should assume you’ll get little effort and commitment.

The pivot point is that employees (the same ones that interact with customers and deliver service each day) will observe and mimic the customer focus that the leadership team sets.

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Posted in Culture, Customer Service, Leadership

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Walmart’s Customer Service Renaissance

Posted on 1 February 2011 by | 1 Comment

It is difficult to argue that Walmart offers ideal customer service (Forrester’s 2011 Customer Experience Index report rated Walmart near the bottom of 30 retail stores).  Nonetheless, Walmart is leading a customer service renaissance through its sustainability initiative.

How?  Walmart is providing healthier food options to its customers.  Who would claim that better health is bad for customers?  For Walmart, however, sustainability and better health are about growth and profitability.

There are only a handful of fundamental ways to increase sales revenues:

  1. Enter new markets
  2. Develop new products
  3. Increase spending per transaction
  4. Increase the number of transactions

The sustainability initiative addresses #4 by lengthening the buying lifetime of its customers.  By providing healthy food to consumers, all other things being equal, customers should live longer.  The longer they live, the more trips they’ll make to Walmart, and so on.  This example is analogous to churn rates (the percentage of customers who defect from your products/services to another option).  The difference is that the “other option” is death.

Some back of the envelope numbers to illustrate:

  • $405,000,000,000 annual revenue (last 12 months ending January 2010)
  • 140,000,000 people shop each week
  • A person spends $55 on average each trip
  • The global population growth rate is 1.133% (2009 CIA estimate)

Now the if(s):

  • IF a consumer’s average spend/trip doesn’t change and
  • IF Walmart’s actions result in improved health so that the mortality rates fall and the growth rates increase by only 0.001%
  • THEN revenue will increase by $4,000,000

These numbers/assumptions are admittedly loose, but they help demonstrate the concept.  We can be sure the smart folks at Walmart (number one on the Fortune 100 list and definitely not operating a charity) know the numbers and that they offer an attractive ROI.

Another potential benefit…

  • IF consumers who normally don’t shop at Walmart start to because they believe the food is healthier
  • THEN Walmart reaps a benefit on #1 above by opening a channel into a new market.  (Have you seen the prices at Whole Foods?)

Whether the sustainability initiative was borne out of altruism or greed, the net result is the same — increased revenue.   The pivot point is that by making strategic investments in the long term viability (i.e. life) of their customers, Walmart simultaneously serves shareholders, employees, and the community.

Which other companies do you know that “get it” and are focused on solving customer problems?

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Posted in Customer Service, When to Deliver Customer Service

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