Category Archives: Leadership / Change / Transformation
“We’re not going to get a perfect solution in the short-term”
Talk abounds, advice abounds: the road to organisational nirvana is laid out by many a guru, professor and consultant. Talk about big data, customer analytics and customer insight. Talk about marketing effectiveness and marketing automation. Talk about sales effectiveness and sales force automation. Talk about great customer service. Talk about CRM. And talk about Customer Experience. Yet, little really changes: I see managers grappling with the same challenges that they were grappling with in 1999 when it comes to marketing, sale, service, and CRM.
Given the abundance in talk why is it that so little changes when it comes to organisational behaviour and organisational effectiveness? Let’s take a look at this question from the position of being on the court (in the organisation) rather than in the stands as a journalist/reporter (which is how many gurus, professors and consultants show up for me).
Working with a number of people grappling with the challenge of improving the sales process, improving customer service, enabling CRM and improving the Customer Experience across the entire customer journey one manager exclaimed “We’re not going to get a perfect solution in the short-term”. What led to this statement? Days of grappling with the challenge; coming face to face with the many and interlinked factors – culture, people, process, systems, data, metric, business priorities – in the way of making any significant changes-improvements.
If you and I had been on the court grappling with the challenges that this manager was grappling with then I say that it is highly likely, almost certain, that we would have arrived at the same place: this is too much to take on, let’s focus on what is doable in the short-term.
A history of short-term local fixes leaves room only for short-term local fixes
Given how everything is interlinked to everything (the systems nature of organisations) and the desire of Tops for ‘instant solutions’ to specific problems, Middles get busy on the short-term fixes and the quick wins. What is missed is that today there is only room for short-term fixes and quick wins because previously management took the route of the short-term fix instead of doing that which was necessary for generating longer term effectiveness.
Every time we intervene in the organisation we make a choice. What choice? The choice to leading the organisation to higher performance or generating a drift to low performance. In fixing the pressing local-functional problem, focusing on the short-term, and going after quick wins, the Tops and Middles are generating a drift to low performance. How/why? Let’s listen to a noted systems thinker, Donella H. Meadows.
“Some systems not only resist policy and stay in a normal bad state, they keep getting worse. One name for this archetype is “drift to low performance”. Examples include falling market share in a business, eroding quality of service in a hospital, continuously dirtier rivers or air ….. state of …… schools…..”
How does this drift to low performance occur?
“The actor in the feedback look (… government, business, hospital….), has …. a performance goal or desired system state that is compared to the actual state. If there is a discrepancy, action is taken……
But in this system, there is a distinction between the actual system state and the perceived state. The actor tends to believe the bad news more than the good news. As actual performance varies, the best results are dismissed as aberrations, the worst results stay in the memory. The actor thinks things are worse than they really are.
And to complete this tragic archetype, the desired state of the system is influenced by the perceived state. Standards aren’t absolute. When perceived performance slips, the goal is allowed to slip. ”Well, that’s about all you can expect.” ……. “Well, look around, everybody else is having trouble too.”
The lower the perceived system state, the lower the desired state. The lower the desired state, the less discrepancy, and the less corrective action is taken. The less corrective action, the lower the system state. If this loop is allowed to run unchecked, it can lead to continuous degradation in the system’s performance.
Another name for this system is “eroding goals”. It is also called the “boiled frog syndrome”……. Drift to low performance is a gradual process. If the system is plunged quickly. there would be an agitated corrective process. But if it drifts down slowly enough to erase the memory of (or belief in) how much better things used to be, everyone is lulled not lower and lower expectations, lower effort, lower performance.”
Here I ask you to be present to what the manager said after grappling with the challenge: “We’re not going to get a perfect solution in the short-term.” Do you see, how it is that if one takes this reasonable approach the organisation almost never gets around to creating-putting in place the ‘perfect solution’? How/why? Because it is never the right team to make difficult decisions, create-accept short-term pain in order to generate longer term effectiveness!
What are the antidotes to eroding goals and the drift to low performance?
In her book, Thinking In Systems, Donnella H. Meadows points out that there are two antidotes:
“One is to keep standard absolute, regardless of performance. Another is to make goals sensitive to the best performances of the past, instead of the worst..….. if one takes the best results as standard, and the worst results as a temporary setback, then the same system structure can pull the system up to better and better performance.
This reminds me of my father. When I was young my father insisted that a) I finish whatever I started no matter what; b) do the best that I was capable of doing; c) strive to do better than I did the last time; d) set my sights on the best performer in the class; and e) take the short-term pain in order to generate the longer term gain.
Amidst the slavish devotion to customer experience and the ideology of customer-centricity I find Ryanair refreshing and instructive – including its recent change in stance towards how the organisation treats its customers. What can we learn from Ryanair and this change in stance?
Financial fortunes (not customer needs) shape management decisions
I find it instructive that trigger for this change of stance is due to a change in its financial fortunes:
- profits may miss or be at the lower end of its range of 570m euros to 600m euros (£480m to £508m);
- a dip in ticket prices and booking levels for September, October and November;
- the continued success of its competitor (Easyjet);
- shareholder concerns that customer service issues were hitting sales.
It occurs to me that what is refreshing about Ryanair’s management team is the refreshing honesty about what motivates-drives their actions. According to this article, Ryanair’s COO and deputy CEO ‘has dismissed the idea of “wholesale changes” at the carrier as it attempts to improve customer service’. Why is that? In the words of the COO
“Our model is to satisfy shareholders. There are other models to satisfy passengers.”
I say that a safe assumption, for any publicly listed company, is that the focus on the management team is no meeting the financial numbers. And any talk of customer-centricity has to be interpreting within this context.
The critical importance of the business model and how it shapes organisational actions
In order for there to be a viable business there has to be a viable business model. Using the business model canvas this means that the following business model elements have to fit together effectively: revenue streams, customer segments, customer relationships, distribution channels, value proposition, cost structure, key activities, key resources, and key partners.
If you take a deeper look at the business model canvas you cannot help but notice that right in the centre sits the Value Proposition. The organisation has to engage in specific activities to create the value proposition. These activities and the way they are carried out determine the cost structure of the business. Therefore, it is essential that the choice of customer segments, customer relationships, distribution channels and revenue streams deliver revenues that exceed the cost base and deliver a suitable return on investment.
It occurs to me that Ryanair’s COO understands the implication of the no frills airline model a lot better than the media which has been implying that the Ryanair management team have seen the light and will be making significant changes. This is what the Ryanair COO is reported as saying:
There is a balance and maybe we have gone too far one way. But the idea there is going to be wholesale changes is wrong.
We need to be better at communicating with customers, but that is no big deal.
When we take €70 from someone for having the wrong size bag we should do it with sympathy rather than glee.
Great advice for all businesses: don’t unnecessarily annoy your customers
I notice that Michael O’Leary (CEO, Ryanair) has woken up to the fact that it is not wise to unnecessarily annoy customers. He is reported as saying:
We should try to eliminate things that unnecessarily annoy customers.
It occurs to me that this does not go far enough. If you are in a management position where you have the power to shape organisational behaviour then I encourage you to end policies and practices that unnecessarily annoy:
- your customers;
- the people that work in your business and create value for your customers;
- your distribution partners;
- your suppliers.
Why? Because that which is unnecessary should not be done. Doing that which is unnecessary and annoys key stakeholders is stupid: self defeating in the longer term.
It does not pay to steal in the longer term
It occurs to me that it is worth bearing the long term in mind. Whilst it is possible to escape the consequences of your actions in the short term, this is rarely the case in the long term. In the long term your history catches up with you. When I was a child my father used to tell me stories to do with human nature. One story, I have remembered vividly, it’s moral was ‘If you steal expect to get caught, sooner or later. The only way not to get caught is not to steal.”
Looking at the Ryanair situation, it occurs to me that Ryanair has been stealing from its customers for many years and this is the year when Ryanair’s management has got caught. And so is having to do something about it.
What did Ryanair steal from its customers? The humanity that one human being expects and counts on another human being to deliver: human dignity.
It occurs to me that empowerment matters. It matters enough for me to think about this deeply and search out those who have thought about this deeply. If it matters deeply enough to you then continue reading. If it does not really matter to you then I advise you to go and do something that you care deeply about. With that said, lets start.
What difference does empowerment make?
It really matters if the people in your organisation show up empowered. Empowered to do great work, to create products which show up as ‘magic’, to touch customers in a way that leaves those customers feeling welcomed-understood-validated-helped, to generate an end to end customer experience that simplifies-enriches the lives of your customers.
It really matters, if you, show up as empowered and create a context that allows the people in your business to show up empowered. And allows your customers to show up and experience themselves as empowered. And creates a space for your suppliers to show up empowered – empowered to share their knowledge and expertise in contributing to the performance of your organisation.
It really matters, if as customers, we show up empowered. Empowered to do business with organisations that stand for purposes-values-behaviours that speak to us. And not do business with organisations that do not stand for and embody that which matters to us. Empowered to get together and apply pressure on regulators and those in government to put in place legislation that protects our interests as customers and to enforce the existing legislation. We are also empowered to do nothing. That is our choice; choice is that which comes with empowerment.
In short, empowerment or the lack of it matters. It occurs to me that empowerment is rather like sunshine in the western world (in the depths of winter) or rain in a region of cursed with drought. Empowerment creates possibilities which simply are not open-present without the existence-presence of empowerment.
Perhaps because I am so vividly present to the significance and possibility that inheres in empowerment, I chose to put my children in Montessori School. It occurs to me that it is also the reason that so much of what is written on empowerment (employees, customers) strikes me as shallow and leaves me feeling disappointed-cheated.
Why all the bleating about the lack of empowerment?
There are two particular aspects of the empowerment conversation that I particularly wish to highlight. First, there is the assumption that empowerment is a thing to be gifted from the Tops to the Middles and Bottoms. And from the Middles to the Bottoms. And from the company to customers. Second, is the assumption that empowerment is a blessing and people are yearning to be empowered.
It occurs to me that by virtue of being human you and I are always empowered. You and I are empowered because you and I are free – free to choose. It occurs to me that Sartre spelled this out rather pithily:
“Man is condemned to be free: condemned, because he did not create himself, yet nonetheless free, because once cast into the world, he is responsible for everything he does.”
What shows up for me as being a more interested enquiry is this one, given that you and I are empowered why is it that you and I evade this empowerment? Why all the bleating about empowerment – more precisely the lack of empowerment? What is it that we are evading through this bleating on the lack of empowerment? Why this supplication at the feet of ‘leaders’? And why is it that so few ‘leaders’ actually show us as being empowered to chart their own course, and thus lead?
Werner Erhard’s profound insight on empowerment
I share with you the profound insight and wisdom of Werner Erhard. And I encourage you (and I) to listen, really listen to his speaking:
“If you are empowered, you suddenly have a lot of work to do because you have the power to do it.
If you are unempowered, you are less dominated by the opportunities in front of you. In other words, you have an excuse to not do the work. You have a way out. You have the security of being able to do what you have always done and get away.
If you are empowered, suddenly you must step out, innovate and create.
The cost, however, of being unempowered is people’s self-expression. They always have the feeling that they have something in them that they never really gave, never really expressed.
By simply revealing the payoffs and costs of being unempowered, people have a choice. They can begin to see that it is possible to make the choice to be empowered rather than to function without awareness.
Empowerment requires a breakthrough and in part that breakthrough is a kind of shift from looking for a leader to a sense of personal responsibility.
The problems we now have in communities and societies are going to be resolved only when we are brought together by a common sense that each of us is visionary. Each of us must come to the realization that we can function and live at the level of vision rather than following some great leader’s vision.
Instead of looking for a great leader, we are in an era where each of us needs to find the great leader in ourselves.”
– Werner Erhard
So what does it take for empowerment to show up?
It occurs to me that it takes the following for empowerment to show up in our way of being-in-the-world:
a) Getting that we are always-already empowered as spelled out by Sartre and so vividly illustrated by Viktor Frankl in his recounting of his concentration camp experiences (Man in Search of Meaning);
b) Caring deeply enough about our being-in-the-world to see-invent possibilities. Possibilities for putting our own ‘dent in the universe’.
c) Courage to put ourselves at risk and act – to live from and into the possibilities that speak to us, to give up comfort and embrace work, to let go of our existing identity and invent-create-embrace the identity that is needed to fulfil on the possibility that we have invented.
What do you say?
I am no longer a fan of customer-centricity nor customer-centric business. I am not a fan of the way many are going about customer focus, customer-centricity, or customer obsession. It occurs to me that the approach taken by many towards arriving at customer focus, customer-centricity, and customer obsession is not gold, it is fools gold.
Why? Because it occurs to me that an organisation that shows up as customer-centric does not centre itself on its customers. At least not in the simplistic sense that is being written-talked about, promoted and acted upon by many.
I get that I make a bold, even controversial statement, and it highly unlikely to win me applause. That is OK, given that my commitment is to write my truth and take a skeptical stance towards the dominant ideologies and practices.
I get that you might want to better understand why it is that I assert that which I assert here. Allow me to point at, illustrate, and unconceal that which I am getting at here by sharing with you some quotes. Let’s start with Emmy Van Deurzen, chartered counselling psychologist and registered existential psychotherapist:
…. one can never ignore the needs of others when making personal decisions but neither can one allow others to entirely determine oneself even when alone. This is a paradox.
Yes, you do need to consider customers – their needs, their desired outcomes, their ‘jobs-to-be-done’, their preferences etc. And you cannot run a successful business just by focussing on your customers. The game of business involves other players whose needs have to be considered. For example, a facet of business life caught my attention whilst working with smaller businesses, which had not so gripped me for most of my life working in big businesses. What facet? The critical importance of finding, hiring, organising, enabling, inspiring, channeling, and retaining the people who actually work inside the business to do that which is necessary to create value for customers. It occurs to me that this is just as important for big businesses, it is not so evident because the dysfunctions of a demotivated workforce don’t show up as vividly in a huge organisation. Or take a look at Zappos, its success is partly built on the way the founders and management team treated suppliers (as a valuable part of Zappos) and thus called forth co-operation from them.
Furthermore, if you simply follow what customers are telling you then you leave yourself open to the disruption caused by those who can see beyond what customers are saying in market research and customer surveys. Here, I share a passage from Matt Watkinson, the author of The Ten Principles Behind Great Customer Experiences:
It is not only consumers who have shifted towards other-directedness and ended up struggling: businesses have too. The dominant obsession with market intelligence, competitor analysis, and customer research is all about developing a more powerful radar, and the endless hand-wringing and strategising over social media betrays the kind of anxieties that are most often found in those eager for the approval of others.
In contrast, we most admire those businesses with a strong inner direction – a clear set of values, integrity and sense of purpose – and tend to lionise celebrity CEOs who bring that ethos to life…….. Customers churn between suppliers to find the best deal, not because we are all extremely price sensitive, but because there is nothing to be loyal to.
What Matt is pointing at here is that we are not simply the kind of beings that economics says we are. Nor are we the kind of beings that rationalist philosophy, behavioural psychology, and scientific management assumes that we are. The human being is a richer human being. A human being that strives for meaning and connection, open to being loyal to ideals, values, missions that elevate human life.
Finally, I want to leave you with wisdom from John Kay, an British economist:
If you want to go in one direction, the best route may involve going in another. This is the concept of ‘obliquity’: paradoxical as it sounds, many goals are more likely to be achieved when pursued indirectly. Whether overcoming geographical obstacles, winning decisive battles or meeting sales targets, history shows that oblique approaches are the most successful, especially in difficult terrain.
Obliquity is necessary because we live in an world of uncertainty and complexity; the problems we encounter aren’t always clear – and we often can’t pinpoint what our goals are anyway; circumstances change; people change – and are infuriatingly hard to predict; and direct approaches are often arrogant and unimaginative.
So let me remind you of my central assertion:
A customer-centric organisation does not centre itself on its customers. It is a paradox. And I say that it occurs to me that the way that many organisations are going about customer focus and customer-centricity, will not get them there. The path heavily promoted, and commonly taken, is fools gold.
Whilst I abhor combat, I do welcome conflict: conflict is simply the showing up of difference. And if difference is approached through the spirit of dialogue then it unconceals aspects of the world that are hidden from each of us. So if you disagree with that which I have written then please speak your mind, educate me, share that which you see and which I do not see. I wish you a great day and thank you for making the time to listen to my speaking.