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 have been reflecting over 20+ years of experience centred on enabling, effecting, facilitating business change and improving business performance. During this time I have been involved with a whole range of management panaceas:
- business process re-engineering;
- management information systems;
- ERP systems;
- shared services
- knowledge management systems;
- kaizen, lean and six sigma;
- the internet;
- database marketing;
- permission marketing;
- relationship marketing;
- 1:1 marketing;
- customer relationship management;
- data mining and predictive analytics;
- organisational development;
- change management;
- leadership development;
- strategy and strategic planning;
- scenario planning;
- balanced scorecard;
- zero based budgeting;
- matrix organisations;
- customer experience;
- customer loyalty schemes;
- employee engagement;
- corporate social responsibility;
- social business;
- digital transformation …
What shoes up for me when I reflect on this experience?
I am present to the gulf between the promise of each of these ‘tools’ and the reality of that which showed up when these tools were introduced-applied in business settings. Rarely did the reality match up to the promise of these ‘tools’. Why? Were these ‘tools’ defective?
It occurs to me that few of these ‘tools’ are fundamentally flawed in themselves. The one that comes to mind is the area of knowledge management. There a huge gulf between information and knowledge. Knowledge management systems are great at holding information. They cannot ever hold-distribute knowledge. Knowledge is contextual, largely tacit and embodied. If you get this then you get that the premise of knowledge management systems is fundamentally flawed.
If most of these tools are sound then why has there been such a gap between the promise and the reality?
Take just one example: CRM. Why is it that whilst CRM systems have become essential part of the corporate infrastructure, they have not fulfilled on their promise: to drive marketing, sales and service effectiveness; and generate sound relationships thus contributing to higher revenues and profit margins?
Before I provide my answer to this question, I pose another question. Why is it that whilst so much is known about Steve Jobs (the way he went about doing what he did at Apple) there will never be another Steve Jobs? Why is it that you can copy Steve Jobs’ techniques and not generate the results that Steve Jobs generated? Why is it that pretty much all one needs to know about Zappos is widely available yet there is only one Zappos? For that matter, why is it that USAA is still in a league of its own?
Here’s my pointer to solving this riddle:
All we have is who we ‘are’, and this in turn shapes what we do. Being is sometimes though of as something intangible, abstract, or even ineffable, but it is actually quite real ….. Being is the context from which all of our thinking and actions spring, as opposed to doing, which is just a content that flows from the context.
Robert Hargrove, Masterful Coaching
The access to empowerment, customer-centricity, and innovation lies in being
Let me put this bluntly, the access to customer-centric organisations lies in being. Not in the ‘tools and techniques’ (the doing, the content). The same applies to cultivating a loyal, motivated, engaged, high performing workforce. And it is no different when it comes to innovation.
If empowerment, customer-centricity and innovation is not your being then all the ‘tools and techniques’ will make little difference. On the other hand if empowerment, customer-centricity, and innovation are your being then you will find or create all the ‘tools and techniques’ that you need as you need them.
There are people in leadership positions whose being is in tune with talk of enlightened leadership, customer focus, and empowerment. I dedicate this post to my friend Lonnie Mayne. I am clear that Lonnie’s being is a clearing for the best of our humanity and our greatness to show up. And as such I find Lonnie to be a source of inspiration.
Take a look at just about any significant change initiative in customer service, CRM, marketing effectiveness, digital transformation, customer experience etc and you will find that the top barriers to successful implementation are do with lack of commitment from the Tops and ‘resistance to change’ from people within the organisation.
In the last post I shared David Maister’s assertion that our performance (individual, group, organisation) often does not improve because we are not willing to do what it takes over the time frame that it takes. Today, I share with you David’s insight into what it really takes to execute strategy, effect organisational change – which always involves personal change as well as organisational change.
This is a long post and I suggest that you read it only if you have an avid interest in strategy execution and/or transformational change. Or if you are wondering why it is that so few organisations have made the shift to being great with customers. And what it will take to make that shift.
Is the transition to customer-centric business like curing a fat smoker or helping an alcoholic recover?
It occurs to me that many organisations are addicted. What are they addicted to? I say they are addicted to a number of factors: a dominant ideology usually manifested in the business model; ‘bad profits’ – profits made at the expense of customers; a fixed way of being including policies, practices, and processes; the short-term fix etc.
In his book, Strategy And The Fat Smoker, David Maister says:
If all business improvement is like curing a fat smoker or helping an alcoholic recover, then what actually motivates people and organisations to change?
We all know the main thing that works: a major crisis! If revenues drop off sharply, it’s amazing how quickly businesses can act to deal with known inefficiencies and bad habits they could have tackled years ago.
… when the first heart attack comes, it’s amazing how many people suddenly find the self-discipline to start living right.
Does David Maister have any guidelines for us on how to effect personal-organisational change without waiting for that ‘heart attack’ to show up and force us to change? He does.
Six guidelines for strategy execution and transformational change
1. Get that it is about a permanent change in lifestyle
In my last post I mentioned that I worked for an organisation that carried out a quarterly NPS rain dance. Everyone went through the motions to get it out of the way quickly and get back to business as usual. To take it seriously, to do what was really necessary at levels-functions of the organisation showed up as being too much effort, too disruptive.
Here’s what David Maister says:
A major source of failure in implementing sensible business strategies is that we underestimate how much effort is truly required to bring about significant improvement.
Individuals and organisations frequently fail to incorporate the new activities into their daily lives. Strategic actions are viewed as special, separate events rather than regular business activities. In other words, there’s real life, and then there’s the diet.
It is about routines , not special events.
My experience since 1999, working on helping organisations shift towards a customer-centric way of doing business, including smarter marketing-selling-service, resonates with David’s words. The customer centric orientation has to be weaved into the very fabric of the organisation through it daily practices - routines – such that these practices become so taken for granted that they become invisible.
2. You must change the scorecards
There is a world of difference between playing a game where one has no skin in the game. And playing a game where one has something that really matters (like one’s reputation or wellbeing) is at stake in the game. Let’s listen to David Maister:
If strategy is to be lived and achieved, it must be publicly tracked, measured and monitored.
We all forgive ourselves too easily. We all find it quite easy to live with guilt. Even a high level of guilt doesn’t always change people. However, embarrassment, even in small doses, can be far more effective.
3. Leadership: get serious or get out of the way
One of my biggest issues with the whole customer bandwagon and business advice in general is that it panders to the Tops and Middles. That is to say the hidden assumption (which serves the interest of those seeking to sell to the Tops and Middles) is that Tops and Middles are perfect – do not need to change their way of showing up in the organisation. And the only obstacles to strategy execution, organisational change, and customer-centricity, are the Bottoms. What does David Maister say given that he has had lots of experience working with the Tops:
Organisations often rush to figure out how the troops need to change in order to live the new standards. However, this is not the first task.
If an organisation’s leaders want their people to believe that a new strategy is being followed, they must establish credibility by proving that they are prepared to change themselves: how they act, measure, and reward.
David Maister goes on to say that he can share countless examples of “failure to do this”. And gives a great example of the instructions he received from senior management prior to running training for managers in the company:
“Please don’t raise the topic of how we ourselves manage these middle managers. We’re not ready to discuss the terrible job we do at that. Keep their attention on what they could do better. We want them to change first.”
4. Principles are more effective than tactics
One of my biggest issues with the whole Customer (service, CRM, VoC, customer experience, loyalty etc) conversation is that it shows up for me as just tactics. That is to say that under all the hype and ideology of customer-centricity and employee engagement there lies a selfish concern with interests of the enterprise: the realm of expediency not principle. What light does David Maister shed on this?
.. successful implementation of a strategy requires both sustained commitment over time and broad participation across the whole organisation. Strategies in business, like diets and alcohol recovery, are implemented much more effectively when the ideas are presented as matters of principle, not just as matters of expediency.
If strategic rules are justified only in terms of outcomes … the diet will always be seen as a punishment on the way to an uncertain and possibly unattainable reward…
If … diet achieves the force of moral principle (“Treating clients and employees with respect is the right thing to do”), the odds are significantly higher that successful implementation will be achieved.
Managers who get things done are people who are viewed as having an ideology. Their people believe that they believe in something …. buy-in and excellent implementation result from a sense of not wanting to let people down.
5. People must volunteer
Looking into and beyond the whole field of change management and what do you see? I see that it exists to deal with ‘resistance to change’. How successful is the change management industry when it comes to dealing with ‘resistance to change’? I say that it’s effectiveness is questionable. What advice does David Maister have for us?
To achieve any goal, you must really want the goal.
A self-improvement program is successful and sustainable only when the individual chooses to to it for himself … The motivations must be intrinsic, because the essence of successful strategic change is not technique, but will …….. you can call it determination.
.. the single biggest barrier to making change is the feeling that “it’s OK so far.” People don’t disagree that the future state of being a nonsmoker would be beneficial, but they resist when they are told that they have to do it.
One of the leader’s roles is to act as a coach, drawing people’s attention to imperfections in the status quo .… asking whether things could actually be better, and questioning whether the desired change is both achievable and desirable…..
6. People must get on or off the bus
If “people must volunteer” showed up as being naive and idealistic for you then this guideline is likely to speak to your concern. David has keen sense of the pragmatic:
Every individual can, and must make a personal choice. But then the organisation must decide how to respond to those individual choices. For an organisation, strategy cannot be what “most of us, most of the time” do.
As all married people who diet know, it’s hard enough to stay the course and resist temptation when you are both attempting to do the right thing. It’s well nigh impossible if those around you continue to indulge and tempt you with food, alcohol etc.
… we cannot force others to do what we want. We can … protect those who have chosen to participate; doing so may require ridding the firm of those who refuse to come on board.
People have a desperate need for the mutual support …. that comes from joining in a common cause. The need to help each other through the tough times … instead of being part of a forgiving culture that keeps discouraging extra effort (“Oh, that’s OK, you can skip exercise today. You deserve a break.”).
Final words of advice on managing the process of change
It occurs to me that too many Tops and Bottoms live in the world of McDonald’s. They decide that they want to improve customer service, focus on the customer experience, build stronger relationships, generate growth through effective use of digital technologies etc – and they want it NOW!
Here’s David Maister’s sage advice based on lived, first hand, experience of making-sustaining transformational change:
Like alcoholic recovery, it is a process that requires you first to make a lifetime commitment, and then you take it one day at a time.
The key is to manage with a philosophy of “It’s OK to stumble; it’s only a sin if you don’t get back on the program.” The primary goal of the beginning stage of a change program is to get people to believe that it is doable and that all we are asking is that they try. This means early successes.
All that wise leader …. talk about is the next step. And they enthusiastically celebrate each small accomplishment. They focus on requiring improvement, not on requiring excellence …
Managing a weight loss program means you stop talking about the ultimate goal….. if someone says to me: “Let’s focus on losing one pound in a week, David. Do you think you can do that? That doesn’t sound impossible, does it?”
Good trainers know that life-changing improvements can and does fail by rushing to either of two extremes. The first extreme establishes overtly ambitious or time-consuming improvement goals, leading to frustration and abandonment of the program. The other extreme fails to establish any pressure to improve, allowing people to pretend they plan to get on the plan, but not just today.