Category Archives: Culture
I say that the way to make a significant impact on the quality of the customer experience (as experienced by the customer) is for the organisation not to focus on improving the Customer Experience. That is a bold assertion and shows up as nonsense to many. So what is it that I am getting at?
It is my experience that after accessing the voice of the customer and doing the journey mapping a range of initiatives are on the table. So the folks around the table getting busy figuring out which initiatives to take forward. Which ones do they take forward? The ones that don’t rock the boat. The ones that are the least risky. The ones that are usually called low hanging fruit: the easy ones that involves a tinkering at the edges, and in the bigger scheme of things make little difference.
To Improve The Customer Experience Ramp Up The Quality Of Competition
Take a look at this photo. Notice, the people standing up – how many there are, and how closely packed they are against one another. I invite you to step into this picture. Imagine yourself standing up in this train. And finding yourself packed in like sardines in a tin.
I found myself on this train – standing up. This train was so packed that it took considerable skill to just get my smartphone out of my trouser pocket – to take this photo. How long was I standing up in this train? For one hour and ten minutes.
So I ask you how is it that this kind of occurrence is actually a regular occurrence on the trains going into and coming out of London at peak travel times? It is so because there is no competition. On each line there is one company that has won the right to run the train services. A monopoly is in place and the folks who need to use the train have no choice but to put up with whatever they have to put up with.
Now consider that the Tops of just about every business strive to minimise the competition. Why? Because where there is no genuine competition, Tops can ignore customers, and run the organisation in a manner that extracts surplus profits from customers.
Looking at the situation from the Customer’s point of view I am clear that the most effective way of causing improvements in Customer Experience is to effect genuine competition into every industry, every market place. Genuine competition for customers will force companies to do that which they are not willing to do today: focus on creating superior value for customers – that includes the Customer Experience.
I don’t know about your country, I do know about the UK. I assert with confidence that there is no genuine-significant competition in many industries: retail banking, grocery retailing (Aldi, Lidl are starting to make a dent), energy (gas, electricity) suppliers, telecom’s providers….
Consider that if business genuinely had the interests of customers at heart then the Tops of every business would welcome increased competition in their market place. Why? It would provide the impetus to do better: to focus on creating superior value for customers – including providing a better Customer Experience.
Is injecting genuine competition into a market place enough? Is it enough to ‘force’ the incumbents to pay attention to customers and do right by customers: focus on providing superior value for customers?
Effective Regulation Is Necessary To Make Competition Work
For two years I was leading a data mining and predictive analytics practice which operated across Europe. So I got to know something about how different countries went about implementing-enforcing the European Data Protection directive. Some countries were effective (Germany, France, Italy, Spain) and others (UK) ineffective. Why? The Germans, French, Italians, and Spaniard adequately funded their national data protection agencies and allowed them to levy unlimited fines (usually running into millions of Euros). I believe one of these countries set up the funding arrangements so that the data protection agency had to fund itself through the fines it levied on those companies found bending or simply not following the legislation. Whereas the UK government provided the minimum funding possible, and limited the fine that the national data protection agency could apply to £50,000.
Let’s get back to the issue of competition. Is it necessary for national governments to put in place effective regulations and enforcers of these regulations? No? Are you of the view that multinationals so love their customers, and are so committed to the Customer Experience, that regulation is not necessary? If so I invite you consider this: business, especially, big business is not customer friendly. Allow me give life to this assertion.
Yesterday I read this Guardian article: France fines 13 consumer goods firms €951m for price fixing. Which companies are involved? Companies include:
- Proctor & Gamble
- Reckitt Benckiser – €121m
- Unilever – 2nd largest fine, €172.5m
- L’Oreal – largest fine, €189.5m
- Johnson & Johnson
- Henkel (maker of Persil) – €109m
- Biersdorf (Nivea) – €72m
- SC Johnson
Which products were involved? As far as I can figure out, just about everything. Here’s what the Guardian says (bolding mine):
The price-fixing affected a large number of popular brands, such as Vanish stain remover, Palmolive washing-up liquid, Sun and Calgonit dishwasher tablets, Sanex and Petit Marseillais shower gel, shampoos including Head & Shoulders, Fructis and Elsève, and Colgate and Signal toothpaste. Mouthwashes, deodorants, shaving creams and razors, female hygiene products, body lotion, facial and sun creams and insect sprays were also affected.
So what went on? What did the folks at these companies do to merit such a large fine? This is what the Guardian says (bolding mine):
The regulator said the 13 companies ….. had colluded on price increases between 2003 and 2006. “These two sanctions are among the most significant imposed to date by the competition authority,” it said. The regulator added that the price-fixing had kept prices “artificially high” affecting consumersand “caused harm to the economy”.
…. commercial directors and other sales officials from the companies involved met “regularly and in secret” to co-ordinate price hikes at restaurants or via correspondence to private homes, as well as through telephone calls. The groups in which they met were called “Team” or “Friends”.
Consider that if business genuinely had the interest of customers at heart – were committed to creating superior value for customers – then business Tops would not only welcome regulation, they’d want it enforced rigorously and big fines handed out to those who cheat customers. Name me a Top that advocates this position – can you think of one? I cannot.
I say greed, selfishness and even corruption permeate our way of life. It permeates politics, national government, and local government. It permeates the police. It permeates business. It permeates the broader society – us. Given this context, I say, all talk of customer - customer focus, customer service, customer relationships, customer engagement, customer experience, customer obsession – is totally and utter bullshit.
Do you study history? I have. This is what I have learnt: every right that you/I enjoy today was earned and paid for through blood of brave souls many years ago. So if you and I are going to be treated right by folks in big business then it behoves us to fight for genuine competition in the market place, stronger customer protection legislation, and effective enforcement bodies. What you and I cannot count on is business itself: yes, the words have changed, and business as usual (screwing customers) continues unabated. I say that the true customer strategy of most business is something like this: blind customers with bullshit, and empty their pockets whilst they are not looking.
Tesco: The Darling of Customer Marketing Guru’s Issues Its Fifth Profit Warning
Tesco continues to struggle. According to this piece from the Guardian newspaper, Tesco has issued its fifth profit warning, share price has plunged (down 16%): Tesco is on the floor. Why does this matter? Why is it worth me writing about. Let’s go back a little.
In the early 2000s Tesco was much lauded my many: the customer-centricity gurus, the 1:1 marketing gurus, the data mining and predictive analytics players, and customer loyalty program vendors. Tesco was the exemplar of harnessing customer data through a loyalty programme (Tesco clubcard), using data mining and predictive analytics to generate insights and then doing database driven marketing based on these insights. In the process Tesco went from being just one player amongst the UK grocery retailers to the the dominant retailer. At one point it looked like there would be no stopping Tesco.
Today Tesco is on the floor. Why? Because Tesco’s management ended up doing what management teams do: exploiting customers to extract surplus profits for the Tops and Shareholders. I think some wise person said something like “power corrupts: absolute power corrupts absolutely.”
What Can We Learn About The Challenge Of Building A Customer-Centric Organisation?
So what is it that you and I can learn from Tesco if we are grappling with the challenge of shifting a business towards a customer-centric orientation: one not based on using data/insight to exploit customers; one based on using data/insights to generate superior value (product, proposition, customer experience) for the customer? Here are the paragraphs from this Guardian piece that catch my attention (bolding is my work):
Lewis [CEO], who marks his 100th day in the job on Tuesday, said he was building “a new Tesco” that would eventually reward shareholders. “We need to get back to core principles. We need to improve the service and availability and that is what we are doing.”
Here is what strikes me, how I make sense of this statement based on my prior lived experience:
1. Moving an organisation from a business as usual (product-centred, extractive, short-term focussed) to a customer-centric organisation is akin to building a new organisation;
2. Building a new organisation is not simple, not easy, not quick. It requires the persistent application of substantial energy across a large number of people for a long period of time – years. Only a CEO who has the power and genuinely cares about the wellbeing of the organisation will do what it takes, and keep doing it over the long term of many years.
3. Part of the challenge in building a new organisation is sacrifice. This sacrifice especially involves shareholders. Why? Because usually the shareholders have gotten fat through ‘bad profits’ delivered by their agents (Tops) putting in place strategies-structures-people-practices that collectively take advantage of customers, suppliers, and the employees – extracting surplus rents (to use the term used by economists);
4. Building a customer-centric organisation is matter of getting back to core principles. Notice, it is not discovering some secret recipe nor the latest shiny miracle technology. It is about honouring already discovered, well known, rarely enacted, core principles. How does one honour a principal? By living it – being an exemplar of that principle in action.
What Specific Actions Does It Take To Be A Customer-Centric Retailer?
Let’s continue this conversation by looking at another paragraph that speaks to me. Here it is:
In a bid to improve customer service, the retailer has taken on 6,000 more staff since mid-October, and despatched 6,000 existing head office staff to spend one day a fortnight on the shop floor to get a taste for the sharp end of the grocery business. Lewis has decided not to lay off people after Christmas, a traditionally slack time for retailers, as part of this customer service drive. “Certain activities help you manage profits, but can have a detrimental impact on how you serve customers,” he said. “What we are trying to do is deliver better for customers … I believe that is the foundation from which we can build a new Tesco, which is financially attractive to shareholders.”
Here is how I choose to make sense of this paragraph:
- A customer-centric organisation is one which “delivers better for customers”. Delivers what better? Delivers better products. Delivers better service. Delivers better value propositions. I sum this up by saying it delivers a better Customer Experience.
Customer service is a key thread of Customer Experience. Organisation which seek to show up as customer-centric have to get customer service right. This is especially so for service heavy businesses where the employee to customer encounter is important, even critical.
Getting customer service right means investing in the people who actually are the customer service of the organisation. Please notice the word “are“. Your front line people are your customer service; they do not merely deliver the customer service that someone else (perhaps in head office) has already produced. This critical aspect of reality is much ignored: your front line people simultaneously invent-create-deliver customer service every time they encounter the customer – they are your customer service!
Investing in people is long term play. Think Warren Buffet: you select the right people and then you hold on to them over and for the long term. That means not laying people off during traditionally slack periods. Why? Because two way loyalty (sticking by one another) is essential to creating the context for greatness to show up from your people. When you, the CEO, take the pain for your people you are putting a deposit in the bank account of goodwill. And this allows you to draw on the goodwill of your employees when you need it. Think Market Basket.
The core challenge of building and then keeping in existence (over the longer term) a customer-centric organisation is this one: “Certain activities help you manage profits, but can have a detrimental impact on how you serve customers”. It occurs to me that this is THE most critical insight. There is a broad range of ingrained, celebrated, management practices that deliver the numbers over the short-term whilst at the same time chipping away at the quality of the Customer Experience. Over the shorter-term there is no visible impact. Then the hit occurs and when it does it is big. I refer to this as the ‘straw that broke the camel’s back’.
The people who collectively constitute the biggest obstacle to making the shift to a customer-centric organisation and keeping this customer-centric orientation intact (and effective) are the people who work in head office: those who make policies, set targets, dictate management practices…. I am talking about the Tops and Middles: those who work with concepts and not reality. John Timpson of Timpson recognised this and turned the role of the head office from a dictatorship to a helpline, and in the process reduced the number of people in head office, and moved them to the branches where the real work of interacting with and serving customers occurs.
Final Thoughts: Leadership and Governance
If find it interesting that the management practices that have brought Tesco to its knees ended up being unconcealed when an outsider (no relationship to the Tops running the organisation) took over the role of CEO; and
It is the competitive world in which Tesco competes which has forced Tesco’s leadership to deal with these management practices. It is only when that which had been hidden (bullying of suppliers by head office folks, bullying of store managers by head office folks, manipulating profits through shady accounting practices) could no longer be hidden that both people and management practices are being addressed.
It occurs to me that Tesco is in crisis as there has been a fundamental breakdown in leadership and governance. The Board of Directors failed to do that with which it is concerned. Ensuring that the right person/s are running the organisation. And overseeing the actions (and management practices) of these people. Interesting then that the Chairman of Tesco has had to walk the plank.
I thank you for listening to my speaking. And I invite you to share your thoughts and experience with me. Looking forward to reading your comments.
Some time ago I found myself in a workshop listening to and observing that which was occurring. As time flowed onwards and my existence kept ebbing away, i found myself sad, deflated. Here were a group of intelligent people who were charged with charting the future of their organisation. And that future included the label of ‘a customer-centric organisation’. There was much talk about customer obsession, trust, customer experience innovation etc.
So how is that I found myself sad and deflated? I found myself present to that which did not appear to show up for the rest of the team. What was I present to? The following says it as well as it can be said:
We construct realities and then forget we were the ones that constructed them. When our relationship with reality has a kind of “is-ness”or “fixed-ness” to it, – it limits what’s possible and allows only for options like explaining, trying to fix, resisting or accepting. The answer to the question, what does it mean to be human, gets looked at only through that lens. The movie The Matrix says it well: “Welcome to the desert of the real.”
- Gale LeGassick, Landmark Education
Time and again, I find myself in meetings and workshops where the talk is lofty yet where the course of action is merely reasonable. What magnitude of possibility lies in a reasonable course of action? Reasonable possibility. What kind of possibility is that? More of the same and results which are merely reasonable. What is another word for reasonable? Average.
The access to new realms of possibility and the generating of extraordinary results lies in the unreasonable. Unreasonable given the taken for granted “is-ness” yet not at all unreasonable when one lets go of the cage of “is-ness”. It occurs to me that if there was a master of ‘reality distortion’ it was Steve Jobs. Which may explain why it was that he was the source of new worlds of possibility and extraordinary accomplishment.
It occurs to me that the deeper reason that so few organisations innovate – in any dimension – is that the folks who are doing the innovating are reasonable folks taking reasonable courses of action. What is more reasonable than going for the ‘low hanging fruit’? Or sticking to the proven methods? Or involving only the people that have proven themselves to be good team players and safe pair of hands?
Innovation is not simply a matter of process / methodology. Nor is it a matter of tools and techniques. At its heart innovation, and that is just another word for transformation, is a matter of being: the being of the folks in the organisation, and the being of the organisation as a whole. Only those whose being is ‘unreasonable’ have access to generating innovation and transforming business.
Put simply: plodders do not cause innovation or transformation, they simply plod along no matter what tools and techniques you put in their hands.
The accessing to innovation / transformation? Leaders: those who are ‘unreasonable’ enough in their being to put their very being at stake to bring forth, into the world, the ‘unreasonable': new worlds of possibility.
I wish to acknowledge members of the ‘methodology police’, whom I met recently, for being the source of this conversation. Please note that for the purposes of this conversation I will use the terms formula, recipe, method, script, template interchangeably.
Is Success Reducible To A Formula/Recipe?
Is communicating with another reducible to a formula? Is relating and cultivating relationships with colleagues, clients, family and friends, reducible to a recipe? Does the co-creation of a ‘good’ customer experience yield to a predefined template? Does the successful implementation of a new CRM systems and the associated way of showing up and operating in the organisation yield to a specific method? Is great customer service reducible to a recipe? What about leadership: is the exercise of leading and leadership reducible to a formula?
YES. If I look at how it is that we show up and travel then it occurs to me that we operate on the basis that the answer is an unequivocal YES. Everything is reducible to a recipe: EVERYTHING. Which means that if the outcomes that we wish for are not showing up then the cause of the problem must be in one of the following domains:
- we are making it up as we go along as opposed to following a ‘proven’ formula;
we are not following the formula/method and as such we need to be manipulated (training, rewards, punishment) into following the one ‘proven’ formula; and
there is something wrong with the recipe, it is not ‘tight’ enough, or it is out of date.
Hence, our obsession in organisational worlds with the likes of processes and procedures, methodologies and methods, scripts, judgment-evaluation of people, criticism, praise, reward and punishment. With this deep rooted obsession we create a wide open clearing for all kind of charlatans to show up and sell their unique ‘secret recipes’ for success – in just any and every domain including the domains of Customer and Leadership.
What Constitutes The Deepest Lack Of Intelligence?
Is there a deeper lack of intelligence (stupidity) than seeking formulas/recipes for the major challenges of business, of education, of living and life? I say yes. What is the deeper stupidity? I say it is keeping our faith in the god like being of formula/recipe intact even when we have followed the formula/recipe and it has not generated the promised-desired outcome/s. Why do we do this? We do this because we grant, individually and collectively, divine status to formulas/recipes. Therefore, it makes sense to conclude that our understanding and/or application of the formula was at fault.
Words Of Wisdom
I invite you to listen to the speaking of one that shows up for me as speaking wisdom:
Once, several years ago, some friends and I enrolled in a cooking class taught by an Armenian matriarch and her aged servant. Since they spoke no English and we no Armenian, communication was not easy. She taught by demonstration; we watched (and diligently tried to quantify her recipes) as she prepared an array of marvellous eggplant and lamb dishes. But our recipes were imperfect; and try as hard as we could, we could not duplicate her dishes.
“What was it,” I wondered, “that gave her cooking that special touch?” The answer eluded me until one day, when I was keeping a particularly keen watch on the kitchen proceeding, I saw our teacher, with great dignity and deliberation, prepare a dish. She handed it to her servant who wordlessly carried it into the kitchen, to the oven and, without breaking a stride, threw in handful after handful of assorted spices and condiments. I am convinced that those surreptitious “throw-ins” made all the difference….
But what are these “throw-ins”, these elusive, “off the record” extras? They exist outside of formal theory, they are not written about, they are not explicitly taught. Therapist are often unaware of them ……. The critical ingredients are hard to describe, even harder to define. Indeed, is it possible to define and teach such qualities as compassion, “presence”, caring, extending oneself, touching the patient at a profound level, or – that most elusive one of all – wisdom?
- Irvin D. Yalom, Existential Pyschotherapy
Concluding Thoughts For Your Consideration
I invite you to consider:
That the guru does not even have to be a charlatan for charlatanry to show up. How so? In this example, the matriarch, was not aware of the “throw-ins” that were being added to her recipe by her assistant.
Where human beings are intrinsic to the game being played, the access to effectiveness (generating the desired outcomes) lies in a sensitivity-attunement to the context in which the game is being played.
Sensitivity-attunement to the context allows you to figure out and put into the game the “throw-ins” that make the difference between the ordinary and the extraordinary.
It is our addiction to slavishly following formulas/recipes that is the biggest obstacle to being attuned and responsive to the context and throwing in the most appropriate “throw-ins” for that particular context in that moment;
Insisting on and slavishly following formulas/recipes (including processes, procedures, scripts, methods etc) is the most significant barrier to effectiveness in the human realm. And that includes the dimensions of Customer (customer service, CRM, customer experience) and of Leadership.
You may disagree. If that is the case then I look forward to hearing what you say.