Category Archives: Management
It occurs to me that when the same ‘problem’ keeps coming up then it worth taking a deeper look at the ‘the way of showing up and travelling’ (some call this mindset or worldview) that generates the methods-techniques-tools for addressing the problem. So in this conversation I wish to grapple with the persistent problems of ’employee engagement’ and ‘customer loyalty’. Let’s start by listening to one of my favourite stories (of wisdom):
There was once a Sufi who wanted to make sure his disciples would, after his death, find the right teacher of the Way for them. He, therefore …. left his disciples seventeen camels with this order: ‘You will divide the camels among the three of you in the following proportions: the oldest shall have half, the middle in age one third, and the youngest shall have one ninth.’
… the disciples were at first amazed at such an inefficient disposition of their Master’s assets. Some said, ‘Let us own the camels communally,’ others sought advice and then said, ‘We have been told to make the nearest possible division,’ others were told by a judge to sell the camels and divide the money; and yet others held that the will was null and void because its provisions could not be executed.
Then the fell to thinking that there might be some hidden wisdom to the Master’s bequest, so they made enquiries as to who could solve insoluble problems.
Everyone they tried failed, until they arrived at the door of … Hazrat Ali. He said: ‘This is your solution. I will add one camel to the number. Out of the eighteen camels you will give half – nine camels – to the oldest disciple. The second shall have a third of the total, which is six camels. The last disciple may have one-ninth, which is two camels. That makes seventeen. One, my camel, is left over to be returned to me.’
This is how the disciples found the teacher for them.
– Idries Shah, Thinkers Of The East
Have you watched The Matrix? It is movie that can be listened to at so many levels. I find the same to be the case for this story. For the sake of this conversation, let me highlight this:
1. The conventional ‘leaders’ had supplied conventional advice which was ok for conventional matters. But not for this unusual one;
2. It is what Hazrat Ali put into the game at hand (‘one camel’) that ended up solving the insoluble problem facing the disciples; and
3. The ‘one camel’ does not refer to a physical camel. The ‘one camel’ refers to wisdom, compassion, love, humanity – the essentials of human existence and authentic community. There can never be a human being only human beings; to be human is to be social.
What relevance does this have to the world of business and the two problems of ’employee engagement’ and ‘customer loyalty’? I say everything. Take a deep look at the methods-tools-techniques used to address these challenges. What do you notice? I notice that the ‘way of showing up and travelling’ (mindset/worldview if you prefer cognitivist rather than existential terms) is extractive: extracting more creativity, time, and effort from the employees and extracting more revenue and profits from customers? Where is the engagement, by the leaders/managers, in the lives (and existential projects) of the employees? What loyalty is there to the customer? Here I am pointing at practices and actions that ensure that the company is loyal to customers – not just words.
Build a Positive Team and Family Spirit by Robin P.
What ‘way of showing up and travelling’ in organisational life calls forth the kind of employee engagement that most organisations can only dream of? I share with the following story as shared by Robin P of Zappos. I invite you to pay attention to that which I have put into bold:
My husband passed away under tragic circumstances …. I couldn’t being to think of what was going to happen for our children, our family, or for me.
When I first heard the news, I was numb, but I needed to make a call. Strangely enough, the call wasn’t to an immediate family member. It was to my employer, Zappos.com. That one action made me realize the strong connection I felt with my co-workers and the Zappos culture…
When my senior manager received by hysterical call, she showed great compassion and gave me sound advice to calm me. She assured me that I shouldn’t be concerned with anything else but to take care of myself and my family, and that – day or night – I should call if I needed anything. After that she gave me every single one of her phone numbers, I knew she meant it.
As much as Zappos meant to me before, the things they did after my husband passed amazed and humbled me. I was reassured that I shouldn’t feel pressure to return to work as soon as possible. They even volunteered to cater the reception for my husband’s service….
There was always someone there to listen, offer consoling words, sit with me as I released my tears, or just give a hug. Co-workers and managers alike allowed me time to heal and gave me strength I needed to continue as a contributing and functioning member of the team.
… the most important contributions from my extended family at Zappos were support and friendship. Zappos was my refuge and healing place that gave me everything I needed to continue on with my life.
– Delivering Happiness, Tony Hsieh
What do you notice here? Are the folks at Zappos applying a particular set of techniques-tools dreamt up by social scientists, consultants, or recommended by HR? Or is it that the folks in Zappos, including her manager, putting their humanity into action: demonstrating care/concern for a human being in distress? Do you/i/we need some kind of special training to do this? Or is it merely a matter of creating an environment where we can put into play that which we know as well as we know how to breathe? Finally, I invite you to notice that domain of ‘care/concern’ for our fellow human beings (customers, employees…) involves action (doing stuff that makes a difference) not merely smooth talk.
It occurs to the that the worst thing that has happened to the world of business is the language of relationship: customer relationships, customer engagement, employee engagement, social.. Why? It masks the reality of the business world and organisational life. What reality? Business and organisational worlds are transactional. There is no genuine care for customers as human beings. There is no genuine care for employees as human beings. There is no genuine care for suppliers/partners as human beings. My lived experience (25+ years) is that those who occupy management and leadership positions are not in touch with their humanity. I doubt that most genuinely care even for themselves as human beings rather than human doings, human ‘achieve-ings’.
I invite you to listen to the following profound words:
To become a leader, first you must become a human being.
– Peter Senge
It occurs to me that all Customer and Employee efforts, like the advice-solutions offered by the conventional leaders to the disciples, are likely to fall short until the advice of Peter Senge is heeded. When it is heeded, and lived, like it is by Tony Hsieh (the CEO of Zappos) then the Tops and Middles will be able to call forth the best from the folks in the business to create meaningful-strong-loyal relationships with customers. With the folks working in the business and directly/indirectly serving customers. And suppliers/partners.
I thank you for listening and invite you to put your humanity into the game of living no matter where this living occurs: with customers, in the workplace, at home….
Please note: an earlier version of this conversation was published on CustomerThink.com last month.
Customers-Employees-Leadership: Distinguishing Between ‘Caring About’ And ‘Caring For’- And Why It Matters
Given that I find myself in the week of Christmas, it occurs to me that today is a great time to diving into caring. And in particular, I wish to make/introduce a distinction. Which distinction? I wish to distinguish between ‘caring about’ and ‘caring for’. Let’s start with the realm of Customer.
Caring About Customers v Caring For The Customer
I am clear that folks in business care about customers. Specifically, they care about:
- Figuring out what makes customers tick – by ‘listening’ to customers through market research, social listening, ethnography, and voice of the customer surveying;
- Getting more customers – turning prospects into customers by pushing out the right message, right offer, at the right time and through the right communication channel;
- Keeping more of their existing customers buying from them for longer – through a range of techniques including making it easier for customers to do business with the organisation (reducing effort, improving access, improving the customer experience) and through targeted incentives (promotions, discounts, loyalty points);
- Selling a wider range of ‘products’ to existing customers – by turning customer data into insight through the use of data mining and predictive analytics or just plain collaborative filtering;
- Moving existing customers from lower margin ‘products’ to higher margin customers – through the use of range of techniques and tactics;
- Winning back folks that used to be customers – usually through some kind of enticing promotion, discount or, rarely, a new/compelling ‘product'; and
- Servicing customers in a smart manner – by using the right combination (digital, telephone) of customer service channels.
Now, let’s turn our attention to caring for the customer. Let’s start with the basic question, who (specifically) cares for the customer? Let’s make this even more specific, who cares for me? As a customer, I deal with many companies and I am clear that there is not one company/organisation that cares for me. Not one! I, as a flesh and blood human being, do not show up on the organisational radar. Does anyone in an organisation ever care for me in a business context? When I interact with the organisations that I interact with do I get left with the feeling-experience of being cared for by an organisation? The answer is: No!
Are there any occasions where I, as a customer, feel cared for? Yes. When do I experience this kind of experience? When I encounter a Welcomer. What is a Welcomer? For me a Welcomer is a human being who, in his being, welcomes me as a fellow human being. S/he going beyond the formalised rituals of business and organisational life, beyond the scripts, beyond the transaction, and reaches out to me as one human being to another. I know when this is going on because I notice and experience the English reserve breaking down. There is breaking down of boundaries, whilst still respecting boundary. There tends to be mutual disclosure of the human kind: sharing occurs. And there tends to be smiling, even laughter. As a result of these kind of encounters, I find myself uplifted, smiling, grateful and with a sense of pride in being a member of the human race. These kind of encounters leave me with hope, with optimism in my footsteps.
I invite you to consider that there is a world of difference between ‘caring about’ customers and ‘caring for’ the customer. Notice the difference: in the realm of ‘caring about’ we are dealing with customers whereas in the realm of ‘caring for’ we are in the realm of the individual customer – that one human being. There is a vast difference. And it occurs to me that the folks who talk about, evangelise about, preach out all things Customer are not present to this critical distinction.
Does this indifference between ‘caring about’ customers and ‘caring for’ the customer matter? I say it matters – it matters to each customer. You see this is the deepest and most radical meaning of personalisation – speaking to the person of that one person (the customer). I invite you to listen to the following words:
The general obsession with observing only historical or sociological movements, and not a particular human being …. is as mistaken as a doctor who does not take an interest in a particular case. Every particular case is an experience that can be valuable to the understanding of the illness…….
….. this indifference to the individual, total lack of interest in intimate knowledge of the isolated, unique human being, atrophies human reactions and humanism. Too much social consciousness and not a bit of insight into human beings.
As soon as you speak in psychological terms ….. people act as if you had a lack of interest in the wider currents of the history of man. In other words, they feel able to study masses and consider this more virtuous, assign of a vaster concept than relating to one person. This makes them …. inadequate in relationships, in friendships, in psychological understanding.
– Anias Nin
I invite you to consider that the strongest bonds, usually called loyalty, occurs where one human being experiences himself cared for (as a unique human being) by another human being. Is it then any surprise that despite the talk of customer loyalty, and all the customer loyalty programmes and tactics, there is so little loyalty between customers and brands.
Caring About Employees v Caring For The Employee
Sure, organisations ‘care about’ employees. It is the employees who do the work – the work that creates value for the the customer. The work that ends up generating revenue and profits. So I find that organisations care a great deal about their employees including but not limited to:
- Attracting the right people to become employees of the organisation;
- Keeping the most valuable employees;
- Getting more out of their existing employees (productivity, collaboration, teamwork, ideas..);
- Ranking employees for performance management purposes;
- Minimising the costs associated with recruiting, retaining, managing, controlling employees.
Now, who in your organisation actually cares for that individual flesh+blood human being to whom you have given the label employee, and, thus deprived him/her of personhood and turned him/her into a category? Let me ask this question differently, as an employee do I feel cared for? Who do I feel cares for me in this organisation in which I find myself employed?
I invite you to consider that there is world of difference between ‘caring about’ employees and ‘caring for’ the person to whom you have given the label employee. Does this difference matter? Of course it matters! Until this difference is recognised and acted up organisations will continue to grapple with the challenge of ’employee engagement’. Why should I engage with you and your organisation when I do not feel myself cared for – as a unique human being?
What Has This To Do With Leadership?
I invite you to consider that this distinction between ‘caring about’ employees and ‘caring for’ the person whether under the label ‘customer’ or the label ’employee’ can be used to distinguish between management and leadership. Leaders must dwell in the human real, the personal realm: ‘caring for’ the person. Here I share the following wise words with you:
My lack of faith in the men who lead us is that they do not recognize the irrational in men, they have no insight, and whoever does not recognize the personal, individual drama of man cannot lead them.
– Anais Nin
Something to Consider And Play For At Christmas?
As you head into Christmas and the festivities where hopefully you will be in amidst people who are family and friends, I invite you to be present to the distinction between ‘caring about’ and ‘caring for’ the folks that you will be meeting up with and celebrating Christmas with. It occurs to me that making the shift from ‘caring about’ the folks you find yourself with, to ‘caring for’ each person that is there will transform your (and their) experience of Christmas.
If you play this ‘game’ you might just find that ‘caring about’ is easy, ‘caring for’ is really difficult. This might just explain why it is that all the folks who speak Customer and Employee make ‘caring about’ masquerade as ‘caring for’. The interesting thing is that whilst we can hoodwink ourselves in the management suite, our customers and our employees are not hoodwinked that easily: they experience and detect the difference between ‘caring about’ and ‘caring for’ – which is why they are not loyal to us and rightly so.
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.
Why is it that I prefer not to business with a customer-centric business? Allow me to share my answer by referring to the UK grocery market. Which supermarket chain was applauded, by many, for its customer-centred way of doing business? Tesco. What was held responsible for fuelling this customer-centred way of doing business? The Tesco Club Card. Through this loyalty card, Tesco captured and made effective use of customer shopping data to grow revenues and optimise profits. In the process Tesco came from nowhere to became the world’s second largest retailer.
Where is Tesco today? Here is what The Economist said back in July 2014:
… on July 21st Tesco abruptly announced that Mr Clarke would be leaving his job, apparently prompted by a warning that profits in the first half of 2014 would come in “below expectations”. In June Tesco revealed a drop in same-store sales that Mr Clarke admitted was the retailer’s worst performance in 40 years….
Recession taught middle-class shoppers that discounters like Aldi and Lidl were cheap but not nasty; they spent some of the money they saved at higher-end grocers, such as Waitrose and Marks & Spencer……
Tesco is faring badly. Its sales dropped by nearly 2% in the year to June while those of its closest rivals, Asda (which is owned by Walmart) and Sainsbury’s, rose by 3% or better. Despite his exertions, Mr Clarke failed to persuade consumers that Tesco offers better value than the discounters or quality to match the upmarket merchants.
Is this as bad as it gets? No. Here is what the Guardian newspaper stated in on the 22nd of September this year:
Tesco has suspended the head of its UK business and called in independent accountants and lawyers to investigate after discovering that its guidance to the City overstated expected first-half profits by about £250m….
Tesco shares fell almost 8% on Monday morning to an 11-year low of 212p, making them the biggest faller in the FTSE 100 index and wiping £1.5bn off the retailer’s market value. More than £6bn has been wiped off share value since 21 July, when the previous chief executive, Phil Clark, was ousted.
Why is it that Tesco is in such deep trouble? I say that Tesco has arrived at where it is at due to its customer-centric way of doing business. What do I mean by this? I mean that the Tops got fixated into harnessing the data yielded by the Club Card to get customers to part with more of their money in Tesco stores.
Was this done by offering customers superior products as in higher quality products? No. The products were middle of the road yet ways were found of selling these at higher prices through clever marketing and merchandising.
Was this done by providing superior customer service in the stores? No. Tesco cut back on the number of people working in the stores so it was not unusual for the customer to find that there was nobody around to help when help was needed or find long queues at the checkout tills.
Was this done through a superior shopping experience? No. Management chose not to invest in the stores or the shopping experience in the stores. As a result the stores become less and less attractive over time.
I prefer not to do business with a customer-centric business because the management of such a business is more likely to be focussed on extracting value from their customer base through a variety of clever manoeuvres than earning its keep through superior products (Apple, Waitrose), superior service (John Lewis, Zappos), low prices (Lidl, Aldi), or a combination of service and low price (Amazon).
If you are a customer and your supplier is touting customer-obsession then you might want to think about whether that is a good thing. Is the obsession with providing you with a superior product, superior value, and/or experience? Or is it an obsession with with finding clever ways of getting you to buy more, pay more for what you buy, and get less in return? You might want to keep in mind that which many remind me of: business is not altruistic.