Why culture is the Achilles Heel of your customer experience efforts (Part I)

The future of most customer efforts has already been written: take a look at your culture

I came to see, in my time at IBM, that culture isn’t just one aspect of the game – it is the game.”  Lou Gerstner

Many large companies are playing the Customer game and most of them will fail.  They may succeed in improving marketing campaign ROI and reducing churn through customer analytics.  They may succeed in reducing customer service costs by implementing making it harder for customer to contact the call centres and by replacing people with self-service systems.  Yes, they may win a ‘battle’ here and their.  Nonetheless, at the strategic level (‘war’) they will fail: they will fail to build customer loyalty and reap the rewards of that loyalty.  Why?

Culture.  If you scratch the surface you find the culture within many large established companies is one of “do whatever it takes to make the numbers!”  Why is that?  Because the Tops are judged by only one thing: making the numbers.  In general, Tops do not care about people – not the flesh and blood ’employees’, nor the flesh and blood suppliers/partner, nor the flesh and blood ‘customers’.  Nor do they care about or have an intimate understanding of operations.  How can they?

They are embedded in a structure (‘system’) which views customers as objects to be manipulated and wallets to be emptied; employees are simply resources which inconveniently come in a human form and are costly hence the focus on replacing them with technology; suppliers are also resources and the objective is to pay the lowest price; laws are simply inconvenient hurdles that one can find ways around; and the rightful role of the Tops is generalship (‘strategy’).  In the world of the Tops (business or politics) the only thing that matters is making the ‘numbers’: the end justifies the means.

This grim picture is mostly hidden from view.  It is the elephant in the room that no-one wants to acknowledge as it is too threatening – it conflicts with our espoused words and values.  Yet, occasionally this elephant burst on to the world stage in a dramatic fashion:  in the USA there was Worldcom, Enron, Andersen and recently the financial crisis; and in the UK we had the MPs expenses scandal, the financial crisis and recently the News of the World phone hacking scandal.

When you exit the ‘matrix of customer babble’ you will tend to find that the real agenda and system structure can best be described as “extracting maximum value at the expense of the customer” – to borrow Fred Reicheld’s words.  Large companies and the people within them resort to any manner of tactics to pry open the customer’s wallet and get as much out of it as possible right now in this transaction, in this quarter, in this year – to make the numbers.   You can see it in the marketing dept where marketers are busy devising all kinds of ‘bait and switch’ tactics.  You can also see it in the love of ‘neuromarketing’ using insight into the human mind to manipulate customers to do what we want them to do.  You can see it in the relentless dumbing down and depersonalising of customer service…….

What is usually missing is any genuine interest in the flesh and blood customers (or employees, suppliers and partners).  And this is obvious to many of us customers and that is why we use TripAdvisor or Epinions or turn to our social networks to get at the ‘truth’ rather than the marketing claptrap.

What is often missing is any sense of fair play: honesty and integrity between words and actions.   Who is best placed to know the reality of organisational life?  The employees.  In one large publicly quoted company the Tops forced all the Middles and Bottoms to sign an ethics policy.  The following week I learned that these honorable Tops had devised a way to get around the law by using a Greek smuggler to do the dirty work and thus distance themselves from any risk.  Does that sound remarkably similar to the News of the World where policeman and private detectives were used to the dirty work.

Is my experience unique?  Not according to employee surveys, one survey that springs to mind highlighted the following:

  • 49% of employees (who responded to the survey) do not have “trust and confidence” in their company’s senior management;
  • Only 36% of employees believe that their leaders “act with honesty and integrity”;
  • 76% of employees stated that, during a recent one year period, they have personally illegal or unethical behaviours at their companies.

How can you build any kind of meaningful relationship with customers with a culture like that?  I will examine that question in part II of this post – coming soon.

Putting people back into the customer experience equation

One of the biggest issues that I have with the customer experience movement is that the process, technology, efficiency and standardisation mindset that is appropriate in the manufacturing environment is being applied to the services industries and the service environment. And in the process the very best of what people have to offer (the human touch, flexibility, improvisation, creativity…..) is being taken out of the picture:  the opportunity to create that emotional bond is sacrified for efficiency.

At the same time, today, I have not been able to do much today (back is playing up) and so I spent some time re-reading an old book (published in 1999) and called “Market Leadership Strategies for Service Companies”.  As I have spent the bulk of my life working in, delivering and advising companies with a heavy service orientation the following passages speak to me and I want to share them with you:

Employees are not the problem, management is the problem

” Over-engineered employees desperately need to once again pursue the most personally satisfying work goal: doing things that make a difference in the eyes of customers.  Employees intuitively know that their core mission should be to provide the kind of help to customers that is truly needed …..Their company’s seeming indifference to being perceived by customers as unique frustrates them……..The net effect is that millions of employees feel robotic in their daily execution of quality, cycle time reduction, re-engineering and a host of other operational activities that perpetuate rather than improve the company….”

Employees are incredibly important and yet misunderstood, under-utilized and over-structured

“Employees are often the most misunderstood, underutilized, and over-structured assets of a service companies.  But next to customers they are the second most valuable asset that companies have.  The problem lies in the perception of the role that employees play in the customer experience.  Many service companies view their employees simply as part of a process that produces an end output – a physical product to be delivered to a customer.  If a customer’s primary focus is on functional performance of the physical product, the employees generally do not need to be involved with the customer experience.  But with services the situation is different.  In fact, in service companies the employees are very involved in the customer’s experience.”

Big mistake: dehumanizing people all in the mistaken (manufacturing) view of quality

” The mistake made by well meaning and well schooled managers is to dehumanize their people – all in the name of quality control.  Service managers attempt to make employees interchangeable.  Although industrialising the service may be important and even necessary, taking the “performers” out of the equation leads to a neutered, indistinguishable experience for customers. ”

Product and quality through people – not by replacing them with self-service technology, standard processes and scripts

“Productivity and quality improvement come from having people involved with customers – people who want the responsibility, can manage themselves, respond well to pressure from customers, and who are highly motivated through skills, job opportunities and pay advancements.”

My conclusion, my interpretation

People – customers, employees, contractors, suppliers, partners matter.  In fact they are critical to business success in service intensive operations and industries.  If you are worthy and you have the know how you can tap into the very best of what they can offer: energy, enthusiasm, passion, creativity, flexibility, discipline, intelligence, wisdom.  And that in itself is ultimately the source of competitive advantage, ongoing renewal, new product development, great customer experience, growth and profitability.

Yet as a very wise French teacher told me when I was about 10 years old: “you can lead a horse to water but you cannot make him drink”.  I believe that is the case with many companies, many CEOs and many management teams.  If they do not value their employees, you cannot make them value them.  Which means the door is wide open to those that get the message and are willing to blaze the trail. For example, John Lewis – who recently delivered a great set or financial results when many other retailers are struggling and blaming the weather.

The core challenge facing the customer experience designer

From a customer point of view what matters is an ‘effective’ organisation – one that is good at anticipating and responding to the diversity of customers and their needs.  That means designing the organisation to be flexible, adaptable, versatile – this allows the organisation to absorb and effectively deal with the variety of demands that are placed on the organisation by customers.  This in turn requires the organisation to have ‘redundancy’ built into it.  That is a fancy way of saying that it needs extra resources (“fat”) to deal with and take advantages of unexpected difficulties and opportunities – to cater for the inherent unpredictability of the world.  Finally, making the parts work well together (integration) is a key requirement of effectiveness.  Think of a car it is only of value if all the components work well together.

Organisations are enmeshed in an ideology that values efficiency and structure that lends towards fragmentation.  The focus is on cutting out all the ‘fat’ so as to minimise operating costs and thus drive efficiency.   This way of thinking involves lots of efforts in up front forecasting and planning to predict and manage demand.  It also involves finding and standardising on the one best way of doing things and then striving to make customers, employees, suppliers and partners to use that one way.   This way of thinking encourages and insists that managers control the real world – at least their piece of it: to act on it so as to force it into the shape that was envisaged in the plan.

So customers want organisation to dance to their specific, individual, tunes.  Whereas organisations insist that customers fall into line – the line that reduces operating costs and thus maximises profitability.  That is how we come to the gaping hole between what customers want and what organisations deliver.

Sometimes the gaping hole gets smaller – at least for a while – when the organisation finds a way of being effective (customer perspective) by taking actions that improve efficiency.  Enter the category of self-service: ATMs, electronic banking, e-boarding card, well designed IVRs to do standard stuff like top up mobile phones come to mind.   At other times the gaping hole grows larger: sales assistants who know less about the products then the shopper, badly designed IVRs, waiting a long time to speak to a human being, call centre agents who are not in a position to help and so pass you on and then on again and so forth.

The fascinating thing about ‘social media’  is that it provides a great opportunity for organisations to be effective (from a customer perspective) whilst being firmly wedded to efficiency.  Yet, there is little movement in the direction of social media because there are a couple of things organisations are more wedded to than efficiency.  Secrecy, ownership and control – in every organisation lurks the dictator.  Again we have a divide: customers want organisations to be open, truthful, clear and collaborative.  Organisations are wedded to secrecy, spin, ambiguity, ownership and control.  And this divide explains why so few organisations have adopted social media to bring customers into the heart of the organisation.

So the challenge that falls to the customer experience designer is how to deliver the effectiveness, openness, transparency and participation that customers want whilst being embedded in an organisation that worships at the altar of efficiency, secrecy, ownership and control – sacrificing many customers in the process.  This is not an easy trick to pull off and it is why I have profound respect for all the people in organisations battling to improve the customer experience!