“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.
Let’s leave aside the theoretical aspects and arguments related to the suitability of using NPS. Instead, let’s consider the implications of using NPS as a performance management tool rather than simply as an indicator which tells us who well we are doing, as an organisation, in building meaningful relationships with customers.
Every human activity produces both things that we want – “goods” – and things we don’t want – “bads”.
- Garrett Hardin, Filters Against Folly
It occurs to me that when we use NPS as a performance management tool we act on the people in the organisation, we act on customers, we alter the balance of power between the multiple parties. And we inject high does of fear and greed into the rich tapestry of human interactions.
This is how we end up generating the “bads” – the dark side of using NPS as a performance management tool. Let’s get specify and look at the dark side. What shows up?
- Customer facing employees (sales, service) and their managers game the system to generate high NPS scores;
Some customers are either ‘bribed’ and-or ‘pressured’ to give high scores;
Some customers, especially the more powerful ones in B2B, exercise their new-found power to extract concessions – free ‘products’, more discounts, credits, special treatment – from the sales reps and account managers; and
Some sales reps and account managers ‘give away’ more than they need to’ in order to play safe and assure high NPS scores. This ‘giving away’ tends to be in the region of services which do not directly impact on the revenue figures and commission cheque of the sale rep.
I leave you to decide whether the “goods” generated by using NPS as a performance management tool outweigh the “bads” that I have shared with you. I do assure you that points 3 and 4 above are not just theoretical – this behaviour is occurring.
Next time you are planning an intervention in the rich web of human relationships get together a diverse group of people, including those who are likely to be impacted, and explore this question: what is likely to happen – today and over the course of time – after we make this intervention?
I have been studying the 2013 UK report by Nunwood’s Customer Experience Centre and in this post I share with you what shows up for me.
Which are the UK’s Top 10 Customer Experience brands and why?
Comparing to last year I notice that:
1. Amazon has dropped to fourth place. Why? The report suggests that this is due to two factors: reputation damage related to tax avoidance and performance of delivery companies.
2. QVC (TV centred shopping channel) comes in at no 2. It appears that in previous years the responses failed to meet the minimum required and so QVC was excluded.
3. The Co-operative Bank has not just fallen out of the Top 10, it has fallen out of the Top 100. Given it’s much publicised troubles centred on its finances this does not come as a surprise. Above all, it occurs to me, that a bank has to have a reputation for being financially sound.
4. M&S, one of the UK’s traditional and loved brands, has moved into the Top 10.
5. Four out of the Top 10 positions are held by two organisations – The John Lewis Partnership and M&S: organisations that have a reputation for caring about their people, caring about their customers and showing this through the quality-range- vfm of their products, and the quality of their service.
Which industries dominate the Top 100 Customer Experience brands?
Given that Nunwood has not done an analysis by industry, it occurred to me that it would be useful to do one. Here is what shows up:
The retail industry leads in the sense that 44 out of the Top 100 places are filled by retail brands. And 10 of the Top 22 customer experience brands are in retail (as classified by Nunwood). Please note I have not listed all of the retail brands in the Top 100 – too many brands.
The supermarkets take 3 out of the Top 10 places, 7 out of the Top 20 places, and 11 out of the Top 100 places. That is quite some domination given the relatively small number of players in this category. It’s interesting that all of the big names are in the Top 20 except for Tesco (47), Morrisons (29) and Lidl (53).
The food & eatery industry takes 14 out of the Top 100 places. None of the brands in this category is in the Top 50. It is interesting to note that Starbucks is missing from the Top 100. Could this be due to the brand damage that Starbucks has suffered due to the tax avoidance issue that has hit Starbucks much harder than say Amazon? Who says life is fair?
The travel & tourism industry takes 16 out of the Top 100 places. There is only one brand in the Top 10 (Virgin Atlantic) and three in the Top 20 (Virgin Atlantic, Butlins, Emirates). Looks like airline travel experience is not that hard to get right if you are committed to getting it right like Virgin Atlantic and Emirates. The surprise appearance (for me) is Butlins. It looks like Butlins have invested in their staff and their hotels and this is paying off.
The telecoms & media industry only takes 3 out of the Top 100 places. Do you notice who is missing? All the big brands like Vodafone, Sky, EE, BT, O2, TalkTalk, Virgin Media …… yet these are the very brands that do much talking about customer service, customer experience, customer-centricity. Seems to me that all this customer talk could just be ‘marketing talk’.
The financial services industry takes 12 out of the Top 100 places. And like the telecoms industry none of the big brands – Barclays, RBS, Lloyds, Santander – are present. It will be interesting to see how much headway the supermarket brands - M&S Bank (23), Sainsburys Bank (83) – can make in this industry. Given the shift to digital-mobile banking, it would be interesting to see what will happen when the likes of Amazon decide to go into that market.
The energy & utilities industry. Have you noticed that not one of the energy and utility players is in the Top 100? No British Gas, no EDF, no Npower, no E.on, no Thames Water, no Severn Trent ….. If the energy industry proves anything it proves this, you don’t need to pay attention to customers when you have structured the industry into an oligopoly and customers have to come to you to buy an essential product.
What does it take to be a Customer Experience leader?
If there is one thing I am clear on it is this, one cannot become a customer experience leader by bolting on customer experience trinkets to the existing way of being-doing. This is about as effective as taking a frigate, adding bits and piece of a fighter plane (say wings), and expecting the frigate to be a great fighter plane. That is just stupid. Most of us can see this stupidity when it comes to warships and fighter places. When it comes to organisations, it is amazing how few see the stupidity of taking this route. What does the Nunwood report say?
Culture and climate are the foundation stone of great experiences. Experiences are delivered through people, the above companies are focusing on creating a culture and climate that starts with meeting all of the customer’s needs, emotional, rational and transactional and then replicating across channels.
Customer experience has many moving parts the key is an integrated approach across a business. It demands an intense focus over the long term. It has to be kept on everyone’s daily agenda.
This requires customer experience to be woven into the fabric of the company, reward, performance management and planning.
Enough for today. In the next post, I will take a more detailed look at some of the more interesting brands in the Top 100. Until then I wish you the very best.
Marketing and Customer Experience: 6 Core Emotional Needs That Shape Human Behaviour (Part 2 – Control)
If you read the first post of this series you may remember that Mark Ingwer in his book Empathetic Marketing asserts that there are 6 core emotional needs of customers: control, self-expression, growth, recognition, belonging, and care. In this post I share my thoughts and Mark’s assertions-insights regarding the primary emotional need: CONTROL.
Satisfying the need for control provides the best access for building customer loyalty
Mark Ingwer is bold in his assertion when it comes to the need for control and the access it provides the smart business:
… satisfying the control needs of the consumer, more than any individual need discussed in this book, holds the most potential for a company to build loyalty to a brand, product, or service through intrinsic motivation, which is the internal sense of satisfaction with the purchasing process and the resulting purchase.
Through the iPod and iTunes, Apple handed control of music over to the music listener. Through the iPhone, iPad and the apps store, Apple handed over much more control over these devices to the user such that each iPhone, each iPad, can truly be customised to the user by the user. Please notice the genius here. By handing so much control over to the user and making it easy for the user to exercise this control, Apple has created a context where each iPhone, iPad is unique and thus irreplaceable. Hence, the value if iCloud.
Why is the need for control such a vital need?
Think for a moment about the last time that you did not have any control over an important aspect of your life. What showed up for you in your body? What emotions surfaced? Was it a pleasant experience? An experience you want to repeat? If you are human then it is likely that this experience was a deeply unsettling one when it occurred. Here’s what Mark Ingwer says on this matter
The need for control fuels our motivation in every aspect of our lives. Positioned near the individuality pole of the needs continuum, control is essential to our every day functioning. We see how this need influences our lives most profoundly when we’re not in control. Some of life’s worst and most stressful predicaments are colored by feelings of helplessness – events in which we are unable to prevent or alter the inevitable.
I invite you to consider the direction of human progress. Is this progress, as in increasing control over that which showed up an threatening for us or made life uncertain or merely difficult? Do you doubt that our ideal, even if unstated, is to have complete dominion (control) over that which shows up on planet Earth. And then our galaxy and eventually the universe. Why might this be? Here’s Mark Ingwer again:
Many situations that fall outside the purview of personal agency hit us in the gut. We feel insecure. We feel small. We fear losing control. And we strive to regain that control. Not only does that loss of control prevent us from achieving our specific outcomes, but it is also often wrenching evidence that signifies our relative insignificance in a large (and largely random) universe.
When we feel in control of external events, in control of ourselves, and in control of our core relationships, we have a broader and more satisfying feeling of contentment and confidence …. we can’t grow as individuals without attending properly to this need.
Customer service and the power of control
Why is it that I do most of my shopping online and do all of my banking online? Because I experience being in control of the shopping process, the banking process. Why is it that I dread having to call up most call-centres? Because, even before I pick up the call I expect a long-tedious-unpleasant experience where I am at the mercy of the IVR, long waiting times, call-centre agents who lack the expertise-will-freedom to actually help me ….. Here is what Mark Ingwer says on the matter:
Nothing reveals the power of control – and the destructive power of lack of control – than customer service situations. Companies that sell services or routinely interact with their customers in service settings must pay special attention to a customer’s sense of control.
Poor customer service results when proxy control is ineffective. If the proxy does not behave as the customer desires, the customer loses control of the situation.
If you are wondering what proxy control is then think about wanting to do your banking online and finding that the website is out of operation. Or imagine needing cash, turning up at the ATM and finding that it is out of order and there are no other ATMs available. Or imagine, ringing up the call-centre and coming face to face with an call-centre agent who speaks with an accent you find hard to understand. Or imagine going to the restaurant with the family, having eaten your meal, finding your young ones tired, looking for a waiter to pay the bill, and the waiter seems to take forever to come back to take your payment. You are desperate to go home and yet cannot do so until the waiter comes over to you and takes your payment.
What advice does Mark Ingwer have for marketers and customer experience specialists?
What I like about Mark Ingwer’s book is the practical suggestions that he provides at the end of each chapter. Here is his advice for marketers and customer experience specialists, as it shows up for me:
1. Review your core marketing message. It should say to customers: you can be in the driver’s seat – assuming products and service can deliver.
2. Examine the customers’ experience. Are prospects and customers in control throughout the path to the final sale and afterwards?
3. Simply after-sales processes.
If you want to learn more about these practical recommendations then you will have to buy the book and read it as I do not want to give away Mark’s secrets and deprive him of readers for his book.
If you remember only one sentence then remember this one
It occurs to me that when it comes to the end to end customer experience then this is the one sentence that captures it all when it comes to the human need for control:
From start to finish, customers must never sense that they are at the mercy of a company or product.
The last time I was in such a situation I walked out of the cinema, choosing not to watch a film that I really wanted to watch, rather than be at the mercy of the cinema and its staff.
In the next post, I will cover the human need for self-expression. It occurs to me whole industries are based on this need. I thank you for your listening.