Stop Trying to Delight Your Customers: The Idea in Practice

Matthew Dixon Lara Ponomareff, and Anastasia Milgramm   January 23, 2012 www.blogs.hbr.org

The notion of going above and beyond customer needs is so entrenched in organizations that managers rarely question it.
But delighting your customers may be a waste of time and energy.

In fact, most customers just want a simple, quick solution to their problem. Exceeding customer expectations has a negligible impact on customer loyalty. Instead of providing a series of bells and whistles in customer interactions, companies need to reduce the amount of effort customers make.
This is the conclusion we found in our five-year study, in which we analyzed customer data from 75,000+ respondents and conducted interviews with hundreds of companies around the world. We presented the findings in the 2010 HBR article "Stop Trying to Delight Your Customers". In it, we explained that what matters most to customer is the amount of effort they put in to interactions: 96% of customers who report putting in high effort in their service interactions are more disloyal, while only 9% of customers who expend low effort are more disloyal.

Because these findings contrast the conventional belief that companies must provide over-the-top service for customers, we've found that companies are often relieved to have hard proof that exceeding expectations — an often expensive and unsuccessful mission — shouldn't be their focus. Then they want to know what steps they should take to reduce the amount of effort their customers expend. In our work with companies to answer this question, we've seen where most organizations struggle: getting buy in from the rest of the organization and figuring out what to tackle first.

To provide practical advice for companies to address these challenges, we created an Idea in Practice that shares the experiences of two companies — American Express Consumer Travel Network and Texas-based energy company Reliant — as they implemented plans to reduce their customers' effort in service interactions.
Here is a preview of two of the crucial lessons:

1. Reducing customer effort doesn't require a 180-degree turn, but a shift in focus. Many of the companies we work with wonder if they have to start from scratch to achieve effort reduction. We've found most companies already have some of the right elements in place, just as Reliant did. Instead of starting fresh, they can reframe initiatives with the goal of effort reduction in mind, tweaking existing processes rather than overhauling them.
2. Focus on the front line. Frontline employees are crucial for good customer interactions. The most successful companies, such as American Express, focus on ensuring that frontline workers have the skills, permission, and the desire to reduce customer effort.

10 Dumb Mistakes Companies Make Over And Over

Steve Tobak  January 23, 1012 www.cbsnews.com

COMMENTARY These days I'm constantly bombarded with books and articles about why leaders, executives and companies fail. It's mindboggling. Most of the "sage" advice is pretty weak, running the gamut from the absurdly obvious to the obviously absurd.

One article by author and psychologist Jack Stark lists the top five reasons leaders fail as greed, insecurity, power, arrogance and narcissism. Can't say I disagree, but I seriously doubt if any of the CEOs I know will be running to a shrink anytime soon. Maybe they should. Mark Stevens, author of "Your Marketing Sucks," says companies fail because of "lack of leadership." Well, thank you Captain Obvious. To be fair, he also lists "complacency" and "conventional thinking," which I do agree with.

Why leaders need a good shrink, not a coach
10 reasons why smart people do dumb things


And while leadership experts blog and tweet all sorts of generic, esoteric nonsense, executives and their companies keep making the same dumb mistakes they've always made, over and over again. Here are my top 10, along with some recent and notable examples:

Killing promising new businesses to maintain old ones. Kodak (EK) just filed for Chapter 11 bankruptcy protection after years of mismanagement and playing catch-up in digital photography. Ironically, Kodak invented the digital still camera in 1975 and then sat on it for a quarter of a century, presumably because it threatened their cash cow, film. When will companies learn that if you don't cannibalize your own business, competitors will do it for you?

Lack of objectivity and perspective. Probably the most common mistake executives make is being too self-contained or breathing their own fumes. They stop asking questions like, "How are we doing," and when a daring customer or employee tries to provide some feedback, they ignore it. As failure modes go, this one even takes down big companies like BlackBerry maker Research in Motion (RIMM), for example.

Failure to articulate the company's strategy. It's absolutely appalling -- and I never use that word -- that there are large, public companies with CEOs who cannot tell you what the company's unique vision and value proposition are. As one VP said of Scott Thompson, the new CEO of Yahoo (YHOO), "Maybe he can let us all finally know what Yahoo is." If he can do that, maybe he can help Radio Shack (RSH) and Sony (SNE), too.

Chronically bleeding red ink. Over the years, I've watched dozens of once prominent companies continue to lose money, quarter after quarter, year after year, until they're either acquired for peanuts or they file for bankruptcy protection. Just so I don't keep picking on Kodak, anybody remember Sun? And will anybody remember Sony 20 years from now?

Not challenging the status quo. Many famous leaders have said it a lot of different ways, but it always comes down to the same message: when you stop challenging the status quo, you're dead. Few companies are great at constantly reinventing themselves and most get by one way or another. But the ones that resist change and try to hold onto what they were are lost.

Poor risk management. The flipside of taking no risks and trying to make believe the world is static is unnecessarily betting the company on huge mega risks or jumping from one strategy to another hoping that one will actually stick. An example of the latter is the current incarnation of AOL (AOL). An example of the former is the old AOL's merger with Time Warner (TWX). And Sprint (S) betting the farm on its iPhone deal somehow manages to fall into both categories.

Ignoring hot new trends. Resting on your laurels, ignoring viral trends and failing to innovate turns market leaders into dinosaurs in record time. Besides Kodak and RIM, there's Nokia (NOK), Yahoo, and for some historical perspective, big iron computer companies like Digital Equipment Corp. whose CEO couldn't understand why anyone would ever want to own a computer.

Dumb customer service policies. It's one thing to suffer a temporary bout of bad customer service over a poorly handled crisis or two, but some companies have systemic issues with bad policies and procedures. The reason, I think, is the inherent conflict between the customer's satisfaction and the company's customer service expense and efficiency. Still, that's no excuse for customer service nightmares we all experience, like these.

Harassing customers. We all get spam in our inboxes, but most annoying is the spam you can't get rid of no matter how many times you unsubscribe. Don't these companies know better? I mean, would you ever consider doing business with a company that doesn't honor unsubscribe requests? Take it from me: persistence is fine, but harassment has the opposite effect.

The Peter Principle. Last but certainly not least is the gold standard of executive failure, the Peter Principle. Incompetence that breeds more and more incompetence, like a Petrie dish in a bizarro universe where the laws of natural selection work backwards, is the perennial gift of business mediocrity that never stops giving.

Study: Most managers are ineffective

Margaret Heffernan January 16, 2012 www.cbsnews.com

Power is the ability to get things done. You could say that management is the art of ensuring that things get done. Yet what's so striking about most organizations is that so little management is effective.

That's what academics Heike Bruch and the late Sumantra Ghoshal discovered when they investigated what they called "decisive purposeful action." Most companies, far from being hives of busy, effective executives, could instead be seen as "a few isolated islands of action amid an ocean of inaction," the researchers found. Does this ring any bells? It certainly reminded me of many places I've worked -- and run -- where a small number of people always seemed to be doing the majority of work that mattered.
Bruch and Ghoshal's study quantified my impression. "What we found in our research surprised us," the authors write. "Only about 10 percent of the managers took purposeful action." The remainder were busy, just not very effective: 40 percent were energetic but unfocused; 30 percent had low energy, little focus and tended to procrastinate; and 10% were focused, but not very energetic.

No wonder most businesses are so unproductive. What all of this suggests (and there's plenty of other supporting evidence), is that we waste most of the human resources we hire. The people around us are either unfocused (they don't know how to use their energy), uninspired (they've lost their energy), or distant (they'd rather think than do.) Leadership is about galvanizing this potential and getting it to move effectively in the right direction.

The 40 percent who are energetic but unfocused are the ones you have to work on. They want to do useful work and are up for a challenge. They just don't know where to start or how to prioritize. When you have a coherent strategy, you give this energy meaningful direction. Unfocused energy is rarely the fault of the individual. Rather, it's an indication that your strategy isn't sufficiently understood or being translated into goals.
The 30 percent who have low energy and little focus are tough nuts to crack. Did they start well and just run out of steam? Are they in the wrong jobs or the wrong company? There's a high likelihood they started out in the energetic 40 percent cohort but became disillusioned and disengaged by their inability to have an impact. Your best hope is that galvanizing the 40 percent creates enough draw within the organization that the best of these get swept along.

I don't really worry about the focused but less effective 10 percent. In my experience, focus is always valuable, even if it's slow. In most companies, everyone knows who fits into which category. You probably know, too. The question is: What are you going to do about them?

7 Tips on How to Apologize in the Business World

This one should be posted over every employee's Desk!!!

Tom Searcy January 13, 2012 www.cbsnews.com

I believe that apologies are woefully underused in professional communication.
Hyper-sensitivity to liability, finger-pointing, entitlement, and a lack of accountability drive good people to avoid acknowledging mistakes, let alone apologizing for them. This resistance to apologizing does all sorts of bad things professionally. The longer issues are left unaddressed, the deeper the resentment and the harder it is to move forward.

Here's what I like about professional apologies:

-- Apologies take the energy out of conflicts
-- Apologies allow for recognition of shared accountability

Believe it or not, there are lots of bad ways to apologize. A few examples of what not to say:

-- "I'm sorry you feel that way."
-- "You have to admit, a big part of this is your fault too."
-- "There's lots of blame to be spread around here."

Here are guidelines on how to make a professional apology:

1. Separate the apology and the explanation -- The apology has to stand on its own. I know you want the other person to understand your intentions, the circumstances under which things happened and, most important, that it is not all your fault. However, he or she cannot hear this at the same time as the apology. They will hear the explanation (read: "excuses and accusations"), rather than the apology. Instead, just apologize. Get clarity that you have apologized, and make no explanations or excuses until the apology has been accepted.

2. Ask for the discussion, but don't insist upon it -- "If you would like to discuss the circumstances around this so we can work on avoiding issues in the future, I'm open to it, but it's not necessary. I want to move forward." This invitation puts the ball into the other person's court and allows for the discussion to be invited rather than forced. If they don't want to discuss, don't push it.

3. One-up the connection -- If you can, you want to move the connection method for the apology to its highest level. Face-to-face is best, but GoToMeeting or Skype is second, then phone, then letter and finally email. The point is that professional apologies are still personal.

4. Don't assume you know what will make it right, but be prepared with options -- If the issue that requires the apology also requires some resolution, ask what the other person believes will "make this right." Have options ready, but don't offer them first. Instead, ask and consider what they have suggested.

5. Own more than your portion -- When mistakes are made or offenses given, there is a tendency to get to a 50/50 assignment of responsibility. You have to own your entire portion without seeking them to own theirs. This usually means owning the entire problem in your apology. Remember, one of the things you are trying to do is get past this point in the business relationship. You won't accomplish that doing "guilt fractions."

6. Focus on what happens next -- Close out the issue with the person and then move to immediate next steps. Time may heal, but action accelerates it.

7. Move on -- There is no sense in hanging onto this issue or walking on eggshells. If you have given the apology and it has been accepted, then you need to keep moving. If the other person chooses to bring the issue up again, simply state, "When I apologized and you accepted it, I considered the matter closed."

Professional apologies allow companies and people to resolve issues, change the direction of a relationship and move forward. If you are looking for "justice" in your professional relationships, I think you are destined for disappointment. I encourage you to be satisfied with resolution and move on.

6 Ways to Fail Your Business

Jeff Haden January 17, 2012 www.cbsnews.com

Here are six ways you could be failing your business:

Your eye has started to wander. You're bored with your business because, well, things have gotten a little stale. You don't want to necessarily leave your company, but you've started to look for a little variety: You're thinking about forming other companies, or starting a side venture, and you pay less and less attention to your primary business. In the process results, relationships with customers and suppliers, and employee morale all suffer.

You focus on the wrong line. When revenue is down it's natural to focus on cutting costs, especially if, like me, you don't come from a sales background. Instead of focusing on the top line and growing sales, you cut and cut and cut until nothing is left. Sometimes it is impossible to save your way to profitability, and focusing on top-line growth is the only long-term answer.

You use "we" at the wrong times. You know there is no "I" in "team" so you try to say "we" -- but at the wrong times. "We worked straight through the weekend," sounds good -- unless you stayed home while your employees were at work. "We need to cut down on errors," sounds good -- unless you're the only one who made the mistakes. Use "I" whenever you personally make a mistake, and use "we" whenever you do something positive.

You network rather than sell. Networking is like sowing seeds. Selling is like harvesting crops. To survive, your business needs sales, not business cards and handshakes. Spend all your time networking on the golf course, at restaurants, and at social events instead of getting out and selling and revenue suffers. Network some of the time -- sell all the time.

You're in it for glory. Does your business serve as an extension of your ego? Is your business just a status symbol? Is your business on display for the greater glory of you? You should serve your business. Your business should not serve you -- and especially not your ego.

You can't stop searching for that one big idea. Innovations and breakthroughs do sometimes build great companies. Innovations and breakthroughs are hard to develop and even harder to deploy, though. Most companies succeed through hard work, attention to detail, and consistent execution. Ignore ideas and small improvements while you search for that one incredible breakthrough and your company will fail. A big idea is unlikely to transform your business; executing lots of small ideas can build a great business.

"No" is the New "Yes": Four Practices to Reprioritize Your Life

Tony Schwartz blogs.hbr.org January 17, 2012

I was sitting with the CEO and senior team of a well-respected organization. One at a time, they told me they spend their long days either in back-to-back meetings, responding to email, or putting out fires. They also readily acknowledged this way of working wasn't serving them well — personally or professionally.
It's a conundrum they couldn't seem to solve. It's also a theme on which I hear variations every day. Think of it as a madness loop — a vicious cycle. We react to what's in front of us, whether it truly matters or not. More than ever, we're prisoners of the urgent.
Prioritizing requires reflection, reflection takes time, and many of the executives I meet are so busy racing just to keep up they don't believe they have time to stop and think about much of anything.
Too often — and masochistically — they default to "yes." Saying yes to requests feels safer, avoids conflict and takes less time than pausing to decide whether or not the request is truly important.
Truth be told, there's also an adrenaline rush in saying yes. Many of us have become addicted, unwittingly, to the speed of our lives — the adrenalin high of constant busyness. We mistake activity for productivity, more for better, and we ask ourselves "What's next?" far more often than we do "Why this?" But as Gandhi put it, "A 'no' uttered from the deepest conviction is better than a 'yes' merely uttered to please, or worse, to avoid trouble."
Saying no, thoughtfully, may be the most undervalued capacity of our times. In a world of relentless demands and infinite options, it behooves us to prioritize the tasks that add the most value. That also means deciding what to do less of, or to stop doing altogether.
Making these choices requires that we regularly step back from the madding crowd. It's only when we pause — when we say no to the next urgent demand or seductive source of instant gratification — that we give ourselves the space to reflect on, metabolize, assess, and make sense of what we've just experienced.
Taking time also allows us to collect ourselves, refuel and renew, and make conscious course corrections that ultimately save us time when we plunge back into the fray.
What follows are four simple practices that serve a better prioritized and more intentional life:
1. Schedule in your calendar anything that feels important but not urgent — to borrow Steven Covey's phrase. If it feels urgent, you're likely going to get it done. If it's something you can put off, you likely will — especially if it's challenging.
The key to success is building rituals — highly specific practices that you commit to doing at precise times, so that over time they become automatic, and no longer require much conscious intention or energy. One example is scheduling regular time in your calendar for brainstorming, or for more strategic and longer term thinking.
The most recent ritual I added to my life is getting entirely offline after dinner each evening, and on the weekends. I'm only two weeks into the practice, but I know it's already created space in my mind to think and imagine.
2. As your final activity before leaving work in the evening, set aside sufficient time — at least 15 to 20 minutes — to take stock of what's happened that day. and to decide the most important tasks you want to accomplish the next day.
Clarifying and defining your priorities — what the researcher Peter Gollwitzer calls "implementation intentions" — will help you to stay focused on your priorities in the face of all the distractions you'll inevitably face the following day.
3. Do the most important thing on your list first when you get to work in the morning, for up to 90 minutes. If possible, keep your door closed, your email turned off and your phone on silent. The more singularly absorbed your focus, the more you'll get accomplished, and the higher the quality of the work is likely to be. When you finish, take a break to renew and refuel.
Most of us have the highest level of energy and the fewest distractions in the morning. If you can't begin the day that way, schedule the most important activity as early as possible. If you're one of the rare people who feels more energy later in the day, designate that time instead to do your most important activity.
4. Take at least one scheduled break in the morning, one in the afternoon, and leave your desk for lunch. These are each important opportunities to renew yourself so that your energy doesn't run down as the day wears on. They're also opportunities to briefly take stock.
Here are two questions you may want to ask yourself during these breaks:
1. Did I get done what I intended to get done since my last break and if not, why not?
2. What do I want to accomplish between now and my next break, and what do I have to say "no" to, in order to make that possible?

Tony Schwartz is the president and CEO of The Energy Project and the author of Be Excellent at Anything. Become a fan of The Energy Project on Facebook and connect with Tony at Twitter.com/TonySchwartz and Twitter.com/Energy_Project.

7 modern workplace myths

by Steve Tobak www.cbsnews.com January 16, 2012

(MoneyWatch)
COMMENTARY: How did we ever get by without social media reminding us how miserable we are at work?
Every time CareerBuilder burps out an employee survey, a thousand blogs and tweets tell us how overworked and under-appreciated we are.

And you can thank Gallup for the latest management fad -- employee engagement. Now, we all know we're not as enthusiastic about our jobs as we should be, either.

Well, here's a curve ball for you. I don't disagree with any of it. For all I know, a high percentage of employees are underpaid, working their tails off, doing the job of two or more people, under-resourced, under-informed and, as a result, hate their jobs.

So what's my beef? Just this: It's been that way forever. There's nothing new here. Maybe it's just me, but from my first summer job as a kid through 23 years in the high-tech industry and eight more as a management consultant, I'm pretty sure I've never seen a workplace where all that wasn't true to some extent.

It's just that we now have the means to ensure that every single one of us is aware of just how miserable we are 24x7 on Yahoo, Google, Twitter and Facebook.

Here are my top 7 modern workplace myths. Not that there isn't some truth to some of them. It's just that they've always been the case, and more in some companies than in others. That will never change. It's all tilting at windmills. Really.

Myth #1: Employees are overworked

From 1980 to 2003, I'm pretty sure I averaged 60 hours a week. In 1991 my CEO signed a bunch of new requisitions for my group. When he changed his mind two weeks later, I nearly had a nervous breakdown. In 1995, I had two different managers literally crying in my office because they were overworked and needed more resources. There's nothing new here.

Myth #2: We need more communication

Sure, communication is as important to business success and organizational effectiveness as it used to be. There's just too much of it. Workplace communication has so jumped the shark. The old problem of protecting domains by limiting the flow of information has morphed into a new problem of hyper-collaboration where everybody's included in everything. Communication overload has reached epidemic proportions and it's killing precious productivity and effectiveness.

Myth #3: Workers are under-engaged

What does that even mean? I guess Gallup has turned it into a big buzzword, but I've been involved in conducting employee surveys for decades. It's the same old thing. Employees are happier (aka, more engaged) about their jobs at some companies than others. Some CEOs are psychopaths who create cultures where employees live in fear, others run their companies like love fests and there's everything in between. It's just a new buzzword.

Myth #4: Managers need to do more

They need to communicate better, listen harder, manage up more effectively, yada yada. Did anyone ever stop to think that maybe managers are the most overworked of all employees because they're the ones who are salaried, which just means they get to work 60 hour weeks on 40 hours pay? That's what I did all those years. Yeah, managers need to do more. Right.

Myth #5: Your job sucks

For one thing it's work, not happy hour. Also it's a free country. You get to decide what you want to do for a living and where you work. Isn't that enough? Sure, the economy sucks. So if you've got a crappy job or a boss who's a jerk, you're sort of stuck for a while. Sometimes it's worse than others, but the economy is cyclical and it's been that way forever. Besides, if you think your company is hell, your boss is the devil, and your coworkers are political, backstabbing creeps, there's a fair chance that it's you. Nobody wants to believe they're the problem.

Does your job suck? It's probably you
Are you sabotaging your own career?
10 ways to stop communication overload

Myth #6: There's a discrimination problem

Obviously, there are isolated incidents of every type imaginable. But these days we have employment laws, protected classes and political correctness. Managers are trained in diversity, executives are coached on sensitivity, and there are plenty of lawyers around to take the case if and when they screw up. The majority of discrimination that's going on in the workplace is the reverse kind.

Myth #7: Corporations are not people

I don't know how to break this to everyone, but if all the people disappeared, so would all the companies. Organizations, executives, managers, employees, shareholders, customers, vendors -- everything about companies from top to bottom -- are all people. Corporations have bylaws, articles of incorporation, stock plans, SEC documents, all sorts of legal documents, all written by and for people. The furniture and computer you use, the facility you work in, all made by people at other companies.