Category Archives: Culture
Recap: Where We Are At
If you took part in the previous conversation you will have a good grasp of the work context that led to the receptionists running to-fro from the front desks to the problem rooms, seeking to keep rooms in reserve so that they were in a position to placate angry customers by moving them to a different-better room, and using their newly acquired guest engagement skills to negotiate with customers – offering them refunds, room rate reductions and/or vouchers.
What Is The Core Challenge Here?
So I ask you what needs to happen for InterLodge to generate its desired outcomes: higher occupancy rates, higher price points per room, higher levels of customer satisfaction, and ultimately a higher share price? Let’s make this question simpler, what is the challenge here? Have a go, formulate an answer to that question.
Isn’t the challenge to shift the work context so that it calls forth, naturally and by default, the kind of behaviour that will result in guest rooms being fit for guests, leading to happy customers, leading to less rooms being kept aside by receptionists and no need for the receptionists to offer discounts-refunds on the room rates?
Now look further-deeper, go into the heart of the matter. Venture into territory that few venture into: think! Keep peeling the onion.
What is the core challenge when it comes to doing that which needs to be done in order to craft-deliver the kind of customer experience (end to end) that causes happy customers? Isn’t it cooperation? Cooperation between all the organisational actors who directly-indirectly influence the customer experience. Is it not your experience that the bigger the organisation, the higher the importance of cooperation, and the lower the likelihood of finding genuine cooperation?
What Steps Did InterLodge Take To Shift-Shape The Work Context?
According to the authors of the Six Simple Rules, InterLodge took the following three steps:
- Did away with the organisational elements that were useless and/or counterproductive. For example, they did away with the financial incentives which were supposed to motivate the receptionists to improve room occupancy. And they stopped the soft skills “guest engagement” training program.
Made managerial promotion dependent on having worked in multiple functions. Why? To encourage and ensure that managers had a lived-experiential understanding of the work of each function and how it related to the work of other functions.
Changed the work context so that cooperation was called forth between Housekeeping, Maintenance and the Front Desk (receptionists).
Let’s dive into point 3 shifting the work context to cause cooperation as the default behaviour. Imagine that is your challenge. What specific action/s would you take to shift the work context and call forth cooperation between Housekeeping, Maintenance, and the Front Desk (receptionists)?
What Actions Did InterLodge Take To Generate Cooperation Between The Multiple Actors?
Before I share the answer with you, I invite you to listen to the authors of Six Simple Rules:
Their [receptionists] work put them in the closest contact with customers, and they were the most directly penalised when customers were unhappy. They had an interest in cooperation but had not way to influence the behaviour of other groups – specifically, the housekeeping and maintenance staff.
So the clue is there: find a way to directly expose the housekeepers and maintenance staff to the wrath of unhappy customer/s. Did management pursue this option? No. Why? Because the did not find a practical way to expose these folks to the wrath of the customer. The customer was most likely to be angry in the evening when s/her checked into or returned to her room. And this is exactly when the housekeepers and maintenance were not at work.
What did InterLodge do? Management give the receptionists a say in the performance evaluation of the folks in housekeeping and maintenance. Did it work? Yes. Why? Because the Receptionists had a say and their say mattered. This is how the authors put it (bolding is my work):
In the past, it had always been enough for these employees [housekeeping, maintenance] to fulfill the criteria and meet the targets of their individual function. Now, people in the the two back office functions were also being evaluated on how effectively they cooperated with each other and with the receptionists, and it was the opinion of the receptionists themselves that carried special weight…. After all, their careers and the possibility of promotion were on the line.
Was it as simple as that. Not quite, this change had to work in conjunction with the other big change:
When this change in how personnel in back-office functions were evaluated was combined with the new cross-functional rotation of managers (which gave managers more of an appreciation for the interdependencies among the various functions), the nature of work changed rapidly at the hotel.
How exactly did the nature of the work change? By this expression the authors are pointing out, in particular, how the way the folks in housekeeping and maintenance ‘showed up and travelled’. Let’s listen once more to the authors:
The housekeepers checked the equipment in the rooms when they cleaned and let the maintenance groups know immediately when something needed attention. What’s more, the two back office functions were a lot more responsive when someone from reception would call asking for help to resolve a customer problem.
What Results Showed Up At InterLodge?
According to the authors:
… InterLodge hotel business unit’s gross margin increased by 20 percent within eighteen months. The rapid improvement in margins allowed the company to … nearly triple it [stock price] in just two years.
If you want to understand the logic behind this then I recommend buying-reading the Six Simple Rules.
What Is The Core Insight-Lesson For Those Working On Customer Experience And Customer-Centricity?
The core insight-lesson is spelt out rather pithily and it is one with which I am in full agreement. The lesson is so obvious and yet neglected. Why? Because it involves taking the “road less travelled”. What is this central insight-lesson:
To achieve customer-centricity make the organisation listen to those who listen to customers. Changing interaction patterns among functions is much more powerful than creating a dedicated customer-centricity function.
There you have it. The challenge of customer-centricity is that of disrupting, shifting, and shaping interaction patters so that transformed work context calls forth the requisite degree of co-operation from-across-amongst all organisational actors which directly and/or indirectly affect the customer experience. And the authors have shared how this was done at InterLodge. And they give other examples in their book, which is well worth reading.
Enough for today. In the next and last part of this conversation I will lay out for you (and comment upon) the sociological theory behind tools for shaping the work context. And why it is that the standard-commonplace approaches (hard, soft, hard+soft) to organisational change and customer-centricity do not work. Like they did not work for InterLodge.
Thanks for listening, I hope you got value out of the conversation.
Imagine that you are the CEO of InterLodge. You face a big problem: your share price has been falling for some time. You need to do something to deal with the issues of high costs and low profitability. You find that the occupancy rate and the average price point per room are too low. And the surveys suggest that Interlodge’s customer satisfaction levels are well below where they should be.
Over to you. What are you going to do about this? What approach will you take? What levers will you use to address the issues?
What Did The Top Management Team Do?
The management team did what most management teams do? It restructured and reengineered. Specifically:
- It created a shared service initiative to serve groups of hotels by region. Why? To cut costs and drive up quality.
It redefined roles & responsibilities of hotel employees. Why? To improve productivity and focus resources on driving up quality.
It rolled out a new computerised yield management system. Why? To improve the occupancy rate.
Did the desired outcomes show up? No. The authors of Six Simple Rules state:
A year later, none of these changes had produced any of the improvements the management team sought …… The share price continued to slide.
What Did Top Management Do Next?
Top management took a bold step. InterLodge’s management committed, via a public announcement, to doubling its share price within three years. Why did management do this? Clearly to support-boost the share price and at the same time to energize the hotel employees. Did it work? The authors say that it had a powerful effect on InterLodge employees. The opposite of what management intended: terrified rather than energised. Why?
Because these hotel managers were expected to increase occupancy rates, raise the average price point, and improve customer satisfaction whilst working within the parameters set by the centralised yield management system, the shared services offer, the organisational design and staffing levels set by the centre.
So the hotel managers acted on the one measure that they felt they could make an impact on: customer satisfaction levels. They acted on the hotel receptionists. Why? Because they came to the conclusion that: the hotel receptionists were young and didn’t care about doing a good job; they lacked the right customer handling skills; and they were not selling rooms to travellers who arrived late in the day even when rooms were available.
So what did the hotel management do? Three things. One, they clarified roles, processes and scorecards. Two, they put the receptionists through a soft skills training course to improve their communication and guest engagement. Third, they set up an incentive plan to motivate the receptionists to sell more rooms and increase the occupancy rate.
Did it work? Here’s what the authors of Six Simple Rules say:
Six months later, however, the problems remained. In fact things had gotten worse. The occupancy rate had dropped further. Average price point was down. Customer surveys showed lower levels of satisfaction. Receptionist turnover had risen.
So what did management do next? It looks like they hired a bunch of smart consultants. What did these smart consultants do.
First, Seek To Understand The Work Context At The Concrete (Lived-Experienced) Level
The consultants sought to understand the work context of the receptionists at InterLodge. Please note that the work context is not the objective situation. By work context I am pointing at the work-context as experienced-lived. How does one get to terms with the work context? In this case, the consultant spend a month observing and talking with receptionists at various hotels. What did the consultants uncover?
- The most difficult, most unpleasant, part of the job for the receptionists was dealing with angry customers;
The receptionists had to deal with angry customers on their own – by the time customer’s rang down to complain the maintenance folks had gone home; and
The maids cleaning the rooms were best placed to spot problems and alert maintenance. Yet, they did not do so due to the silo based performance metrics to which they were held accountable – productivity in cleaning rooms.
What is the insight that eventually hit the consultants? Here it is in their words:
the goal of the receptionists was not to earn a financial incentive by improving the occupancy rate. No, the goal of the receptionists was to avoid the unpleasantness of dealing with unhappy customers.
How did the receptionists deal with the situation that they found themselves in?
- The younger receptionist sought to fix the problem themselves. This meant they found themselves running back and forth between their front desk and the problem rooms. This behaviour didn’t work for the customers who arrived at the front desk and found nobody there. And so had to wait.
They kept rooms in reserve so that they could placate customers. Why? Because even if the new room wasn’t so much better, angry customers appreciated the receptionist who went out of his/her way to help.
They adjusted the room rate downwards. The customer harnessed their new found guest engagement skills to negotiate a refund, rebate, or voucher to deal with angry customers.
What Can We Learn From This Understanding of The Work Context?
The authors have something powerful to say and I urge you to listen, really listen:
… the young receptionists were forced to bear the adjustment cost caused by the behaviour of the back-office functions [Housekeeping, Maintenance]. They had little choice in the matter, somehow, they had to deal with the angry customers. The adjustment costs they suffered were simultaneously financial (they didn’t achieve their bonus), emotional (they were blamed by both managers and customers), and professional (at a certain point they would become so burned out that they would quit….).
But customers were also bearing adjustment costs in the form of poor hotel experience. And of course, so were the shareholders in the form of declining returns….
Receptionists could never fully compensate for what the back-office functions [Housekeeping, Maintenance] could have achieved had they been cooperating with each other…
Once the management team took time to understand the context of the work in its hotels, it came to realise that the problem was not that the receptionists were badly trained, or had some psychological issue or attitude problem, or needed more incentives. Rather, their behaviours were rational solutions to the problems they faced.
What actions did the InterLodge management take to shift-shape-transform the work context? And what kind of results showed up? I will share these with you in the next post.
Let’s assume that for the purposes of this conversation that when I use the term customer-centricity I am pointing towards a specific behaviours which show an organisation as being attuned and responsive to the needs of their customers – their core customer base.
How should you go about effecting change in the behaviour of your people, your teams, your functions, your business units, your entire organisation so that your organisation shows up as customer-centric? The authors of Six Simple Rules point out that managers go about effecting change by typically taking a hard approach (strategy, structure, process). And when this fails or to make it more appealing they introduce elements of the soft approach (training, team building, affiliation events). How well do these approaches – hard, soft, hard+soft – work?
In the last post I illustrated what tends to happen when managers take the hard approach: set direction, communicate direction, set metrics to hit, change the bonus system. What about taking the soft approach? How does that tend to work out? Lets return to David K. Hurst’s experience at Hugh Russel:
The top management team emerged from Hugh Russel as a “band of brothers” ….. we found we could “read ” situations better … “contextual intelligence” seemed to be an important feature of our newfound skills. So, after our near death experience, we set out to create an educational experience that would nurture the spirit of commitment, excitement, and engagement we had seen at the senior level of the organisation….
What did this senior leadership do? They organised a series of 3 day retreats ["core samples"] where 50 people drawn from all levels of the company (truck drivers, salespeople, branch managers, vice presidents) were invited to a “lovely old cottage”. What happened on the retreat? The participants hung out together doing team exercises, case studies, got feedback on their behavioural styles, and discussed the issues that the Hugh Russel was facing. How did it go? The senior leadership were delighted with the results:
Discussion at the meetings was open and honest, the behaviours observed were cooperative, and the feedback from the participants was excellent..…… our local branch managers, who nominated most of the attendees, told us that they saw changes in the behaviour of those who had come to the session, even staunch union members. We were very pleased.
The soft approach works! If you take folks from all levels of your organisation to a three day retreat, at a nice place, educate them, teach them, develop them, give them feedback, and allow them to hang out with another then you are well on your way to being customer-centric. Or are you?
Then, over time, the feedback from the managers became less positive….. after awhile back at work, the participants began to revert to their old dysfunctional habits. Many of them who had been cooperative and open during the core samples became surly and aggressive again after a few weeks back at work.
Slowly it dawned on us that we had completely misunderstood cause and effect….. We thought we were teaching them new behaviours, which they could practice back in the workplace. But they knew these behaviours already since they were the ones the workers used in friendly environments, like their homes or bowling alleys or golf clubs. The open environment of the development sessions evoked those social behaviours.
Please make note of the line that I have put in bold. The behaviour that was being taught was behaviour that the folks already had in their very being: cooperation is intrinsic to us. In infant never makes it past infanthood unless it arrives and is nurtured in a cooperative context. So if cooperation is not showing up in the work context then it is because non-cooperation is the functional behaviour in the work context. And cooperative behaviour is dysfunctional in that work context. What can we learn from David K. Hurst?
We had misunderstood the power of context over our people’s desire and even their ability to practice these behaviours back at work. The closed work setting was completely different from that of the country estate …..
Martin Heidegger was on to this phenomenon back in the 1920’s almost a hundred years ago. Most managers are yet to get it: when you ‘deworld the world of its worldhood’ you are in the land of theory. And what is theory? Theory is derived from the Greek word: theoros. What does theoros signify? Spectator. And if you follow that which I speak here on this Blog, you may have gotten the profound difference between “being in the stands and being in the arena”.
Let’s continue listening to David K. Hurst:
…. we weren’t teaching them soft skills that they didn’t already know; we weren’t conveying any hard skills that might have been helpful to them; we weren’t using live company cases or confronting real issues…… our management development program had some of the ingredients of a behavioural trap – short term rewards and a long terms waste of resources.
How does David K. Hurst conclude this story? With a profound lesson for anyone seeking to effect behavioural change that lasts:
This is a perennial problem with development programs, especially those that depend upon a radical change in context to produce their effects. Climbing a challenging mountain peak or whitewater rafting can certainly build temporary espirit de corps in a team. However, the challenge is not to take the skills learned in those challenging contexts back to the workplace but to create challenging workplace contexts that evoke those desirable behaviours. The development sessions should deal with the constraints that prevent an organisation from creating challenging work environments where learning and teamwork are a natural response….
– David K. Hurst, The New Ecology of Leadership
1 – That the challenge of showing up as a customer-centric organisation is one that involves a radical change in context to produce the kind of behavioural change that is needed from just about every person in your organisation;
2 – The central task of any leadership team is to get to grip with the existing work context – to understand what it is about the context that generates the behaviour that is generated today; and
3 – Using this insight to nudge-influence-shape the work context (made of up many micro work contexts) such that the only functional way for your people to show up is as being attuned to and responsive to customers.
What Is The Weak Point Of Many Organisations?
In a few days I had grasped the main principles on which the hotel was run …….
What keeps a hotel going is the fact that the employees take a genuine pride in their work, beastly and silly though it is. If a man idles, the others soon find him out, and conspire against him to get him sacked…… everyone in the hotel had his sense of honour, and when the press of work came we were all ready for a grand concerted effort to get through it….
This is the good side of hotel work. In a hotel a huge and complicated machine is kept running by an inadequate staff, because every man has a well defined job and does it scrupulously. But there is a weak point, and it is this – that the job the staff are doing is not necessarily what the customer pays for. The customer pays, as he sees it, for good service; the employee is paid, as he sees it, for the boulot – meaning, as a rule, an imitation of good service. The result is that, though hotels are miracles of punctuality, they are worse than the worst private houses in the things that matter.
Take cleanliness for example. The dirt in the Hotel X, as soon as it penetrated into the service quarters, was revolting ….. the bread-bin was infested with cockroaches….. The others laughed when I wanted to wash my hands before touching the butter. Yet we were clean where we recognised cleanliness as part of the boulot. We scrubbed the tables and polished the brass work regularly, because we had orders to do that; but we had no orders to be genuinely clean, and in any case had no time for it. We were simply carrying out our duties; and our first duty was punctuality, we saved time by being dirty.
In the kitchen the dirt was worse….. he [French cook] is an artist, but his art is not cleanliness..… When a steak is brought up for the head cook’s inspection, he does not handle it with a fork. He picks it up in his fingers and slaps it down, runs his thumbs round the dish and licks it to taste the gravy, runs it round and licks it again, then steps back and contemplates the piece of meat like an artist …. then presses it lovingly into place with is fat, pink fingers, every one of which he has licked a hundred times that morning…..
Dirtiness is inherent in hotels and restaurants, because sound food is sacrificed to punctuality and smartness. The hotel employee is too busy getting food ready to remember that it is meant to be eaten. A meal is simply ‘une commande’ to him, just as a man dying of cancer is simply ‘a case’ to the doctor. A customer orders ….. a piece of toast. Somebody pressed with work in a cellar deep underground, has to prepare it. How can he stop and say to himself, ‘This toast is to be eaten – I must make it eatable’? All he knows is that it must look right and must be ready in three minutes. Some large drops of sweat fall from his forehead onto the toast. Why should he worry? Presently the toast falls among the filthy sawdust on the floor. Why trouble to make a new piece? It is much quicker to wipe the sawdust off… And so it was with everything…..
Apart from the dirt, the patron swindled the customers wholeheartedly. For the most part the materials of the food were very bad, through the cooks knew how to serve it up in style. The meat was at best ordinary, and as to the vegetables, no good housekeeper would have looked at them in the market …… The tea and coffee were of inferior sorts, and the jam was synthetic stuff out of vast unlabelled tins ……. There was a rule that employees must pay for anything they spoiled, and in consequence damaged things were seldom thrown away. Once the waiter on the third floor dropped a roast chicken down the shaft of our service lift, where it fell into a litter of broken bread, torn paper and so forth to the bottom. We simply wiped it with a cloth and sent it up again. Upstairs there were dirty tales of once-used sheets not being washed, but simply damped, ironed and put back on the beds. The patron was as mean to us as to the customers ….. And the staff lavatory was worthy of Central Asia, and there was no place to wash one’s hands, except sinks used for washing crockery.
In spite of all this the Hotel X was one of the dozen most expensive hotels in Paris, and the customer paid startling prices. The ordinary charge for a night’s lodging, not including breakfast, was two hundred francs …. If a customer had a title, or was reputed to be a millionaire, all his charges went up automatically…..
George Orwell, Down and Out in Paris and London
What is that the astute change agent can learn here?
I don’t know. Here is my take on the matter of leadership and organisational change – including shifting organisations to be more responsive and aligned to customer needs:
The context is decisive
- Werner Erhard
The underlying structure of anything determines its behaviour
- Robert Fritz
I urge those of you who strive to be effective in effecting change need to master and obey these insights. Most of us don’t – even if we get these distinctions we don’t have the time, the energy, the resources, or the passion to do that which is necessary. Which explains why it is that most organisational change efforts yield disappointing harvests. And why most ‘customer-centric’ change efforts fail to yield an organisation that shows up as customer-centric. Perhaps genuine customer-centricity is unnecessary – maybe it is a matter of faking it like the patron and employees of the Hotel X were faking it. Perhaps not – today just about everyone has digital media and access to social media. You decide.
I dedicate this post to James Lawther who reached out to me when reaching out occurred as a most welcome kindness. James called me back to the conversation that occurs in this blog.
I find myself interested and caring for the human. So the following slogan caught my attention: “There is no more b2b or b2c: It’s human to human”. This got me wondering: What does it take for us to show up and operate as ‘human to human’?
If we are to do business in a ‘human to human’ way then it helps to have a good grasp of what the defining characteristic of human is. In Being and Time, Heidegger asserts that ‘Care (Sorge) is the being of dasein’. For the purposes of this conversation dasein = human being. What does Heidegger mean by this? I take it to mean that I do not find myself indifferent: to myself and my experience of living, to the world in which I find myself in, to my fellow human beings. It matters (to me) how I live and how my life turns out. It matters (to me) how my fellow human beings live and how their lives turn out. And it matters (to me) how this world is and is not. I care as I am aware that I am being-in-the-world-with-others-towards death.
If we are going to show up and operate from a ‘human to human’ way of doing business then we must genuinely care for ourselves, the people we work with, the people we sell to, the people we buy from, the people whose lives are touched by us and our way of showing up and operating in the world. How best to illustrate this? Allow me to share a story the following story with you (bolding is my work):
Harry, an emergency physician …. One evening on his shift in a busy emergency room, a woman was brought in about to give birth…….. Harry was going to deliver this baby himself. He likes delivering babies, and he was pleased…… The baby was born almost immediately.
Whilst the little girl was still attached to her mother, Harry laid her along his left arm. Holding the back of her head in his left hand, he took a suction bulb in his right and began to clear her mouth and nose of mucus. Suddenly, the baby opened her eyes and looked directly at him. In that moment, Harry stepped past his technical role and realised a very simple thing: that he was the very first human being this baby girl had ever seen. He felt his heart to go out to her in welcome ….
Harry has delivered hundred of babies. He has always enjoyed the challenges of delivery, the excitement of making rapid decisions and feeling his own competency, but he says that he had never let himself experience the meaning of what he was doing before. He feels that in a certain sense this was the first baby he ever delivered. He’s says that in the past he would have been so preoccupied with the technical aspects of delivery, assessing and responding to needs and dangers, the he doubts he would have noticed the baby open her eyes or have registered what her look meant. He would have been there as a physician but not as a human being. It was possible, now to be both…
-Rachel Naomi Remen, Kitchen Table Wisdom
This is what I notice about the whole Customer thing: the focus is almost exclusively on the technical stuff (metrics, data, analytics, technology, processes) and almost no recognition of the human. Does this matter? Yes. Why? I leave you with these words of wisdom:
Quality matters when quantity is an inadequate substitute. If a building contractors finds that her two-ton truck is on another job, she may easily substitute two on-ton trucks to carry the landfill. On the other hand if a three star chef is ill, no number of short-order cooks is an adequate replacement. One hundred mediocre singers are not the equal of one top-notch singer…
- Richard Rumelt, Good Strategy Bad Strategy
We may not be able to define-measure-calculate quality. Yet we are present to it when we experience it. The quality that you/i/we experience from the people we interact with, work with, sell to, buy from, makes a huge difference to our experience of living. This quality of caring cannot be faked, though many folks make the attempt to fake it.
Interestingly, in our age, it is easier to build this caring into the ‘product’ itself (Apple) or the digital interface (Amazon) than it is in human to human conversation-encounters. Why? Because we have become so wrapped up in the technical that we have lost touch with the human – including our own humanity. Yet, it is possible to get in touch with this humanity and give it expression: to show up as a CEO and as a human being; to show up as a CMO and as a human being; to show up as CFO and as a human being; a sales person and as a human being; to show up as call-centre agent and as a human being……
Please note: I am about to go on vacation and will be out of touch for several weeks. I wish you well and look forward to being in communication after the holiday.