What Drives Customer Service Levels?

It’s often not clear what makes one organisation give better customer service compared to another; or why within the same organisation, one individual will seem to have a natural ‘gift’ to want to look after a customer, whereas other individuals give the impression that they couldn’t really care less.
 

The media is full off articles about poor service, though hardly ever on the front pages anymore – where you’ll have stories about Vodafone still holding people to their mobile phone contracts, even after they’ve died; or banks like Santander losing client’s money and not being in a rush to find it or simply fobbing customers off who ask for a basic service. Stories in the press are mostly about large corporates giving poor levels of service, but this doesn’t mean that it’s only large corporates that give poor service (as we’re probably only to well aware); it seems to happen within all sizes of organisation and across most, if not all, industry sectors.

So what drives some organisations and individuals to genuinely want to offer customer service and to respond when they find that their standards fail; and what drives other organisations and individuals to not really care about the customer and service, and how does this segment actually get away with it?

In some industry sectors, size definitely matters, where organisations are in a quantity rather than quality driven environment. The mobile phone industry, banking, insurance, etc. are all quantity based businesses – where there seems to be a wide spectrum of acceptable levels of ‘customer service’ which not only differs across the different organisations, but can differ significantly across different branches within the same organisation.

In these industries there can be a disconnect between the ‘vision’ that the executive desire, compared to what actually happens on the ground in respect of recruitment, training, day-to-day management, complaints procedures and follow-up. Though if there is a disconnect then it’s the executive who are accountable for making sure that their corporate vision for customer service, is translated through to action on the ground.  

At the other extreme there are small, often one-man organisations, like plumbers; electricians; garden service; home renovations; etc, that also seem to cover the whole spectrum with respect to customer servce to the people focused on giving great service and value for money; to those that seem to get a ‘kick’ out of ripping people off, and even more amazingly not only getting away with it, but being able to continue operating in their chosen profession.

Whether a large corporate or a small one-man firm, most are in business to make money and to make some form of profit so they can at least survive where, and I’m not sure if it’s the exception or the rule, some firms want to maximise their profitability, regardless of the potential loss of long-term customers due to poor service.

The fact is, whether we like to admit it or not, the customer receives the service that they and the organisation are prepared to accept, i.e. you will be treated, how you allow yourself to be treated – meaning that most of the time customers don’t complain enough as, it takes time and effort and there’s often a cost involved, whether it’s phoning the customer complaints line or putting a stamp on a letter.

Admittedly this is a very generic statement as customers in some countries are more prevalent to complaining than others; and the laws for consumers are much tighter in some countries compared to others – so it’s not just about the customer, but the legal and cultural ‘set-up’ in your own country.

Another key issue at this particular point in the global economic cycle is that the majority of people have become much more cost conscious during the economic downturn and hence focus more on price than service – though that doesn’t mean they’ll accept inferior quality products or services; unless in their perception it equates to value for money or they simply cannot afford to complain.

The concept of service and the levels they want to give squarely rests with the organisation – and it’s the leadership’s responsibility to ensure that the standards they require and envisage as part of their strategy and image, are transformed into action on the ground.

But it's customers that allow poor customer service to raise its head and become an acceptable behaviour, whether it's an organisation, a branch or an individual – because not only don’t we complain enough, but ‘we’ also go back and ask for more – simply reinforcing the bad behaviour as acceptable.

 

How Do You Recognise Staff Achievements?

Organisation success isn’t achieved by one person at the top; it’s achieved by a group of individuals working as an organisational team to achieve predetermined goals – some individuals will have greater accountability and/or greater skills than others but, if the structure is right, then it works like an orchestra where everyone is required to achieve the predetermined organisational goals and objectives (or at least they should be if your organisational development is correct).

 

The business world has the full spectrum of leadership types from the arrogant, narcissistic type leaders who consider all successes to be of their making, and their making alone, yet where they conversely believe that any failures are the fault of others somewhere in the organisation – but certainly nothing to do with them.

 

Great leaders have emotions like everyone else, and have their good days and their bad days too – but what they recognise is that they develop and communicate the corporate vision and strategy (after following a fully ‘inclusive’ process); and then give direction to help others reach that vision but they constantly appreciate the hard work and accomplishments of their staff at all levels, not just the level just below them.  

 

It’s actually not rocket science – even a bad leader will remember at least one time when they were praised for something they accomplished and how good it made them feel, regardless that it may have been many years ago. So there is really no excuse for anyone in a leadership position not understanding and ‘getting’ the individual impact, both in terms of motivation and performance, that acknowledging and recognising an individual’s successes and achievements has on them – but only where this recognition is shown and given in an honest and genuine manner.

 

Robert Eckert, former chairman and CEO of Mittal, (2000-2012), wrote the following in a 2013 HBR article, “Wherever I show my thanks, these tips work well for me:

 

• Set aside time every week to acknowledge people’s good work.

 

• Handwrite thank-you notes whenever you can. The personal touch matters in the digital age.

 

• Punish in private; praise in public. Make the public praise timely and specific.

 

• Remember to cc people’s supervisors. “Don’t tell me. Tell my boss.”

 

• Foster a culture of gratitude. It’s a game changer for sustainably better performance.”

 

I’m not sure how much social media might be to blame, as some people try to understand how to ‘manage’ their image to what they perceive to be a global audience, but there seems to be a change in direction where some people in positions of power want to take personal credit for ‘organisational’ achievements, so it can be ‘out there’ for all to see on the www.

 

These aren’t necessarily the narcissistic leadership types, who without a doubt don’t recognise any success to be anything less than ‘their brilliance’. No these are the leaders that lack confidence and hence are petrified of others potentially getting noticed for good work or special achievements, where they see these workers as potential threats and replacements for them – and hence they consider ‘recognition’ taboo, as it is contrary to their survival strategy. If you’ve ever come across these leadership types, you’ll know exactly what I’m talking about.

 

Recognition is always a natural behavioural trait within an organisation which has a positive business culture and ‘effective’ leadership (at any level). If you have confidence in your own abilities and appreciate what makes a business great – then recognition is the easiest thing to give and can have the greatest ‘pay back’ for an organisation.

 

Interestingly cosmetics entrepreneur Mary Kay Ash put it this way: “There are two things people want more than sex and money: recognition and praise.” These kind of glib comments often garner a negative response in the social media sphere as most people misunderstand and think that she’s saying money isn’t important – but what’s she’s saying is that assuming an employee has the ability to make a ‘living’ and that they can ‘move between jobs’ relatively easily then an employee will seek ‘job satisfaction’ as a primary driver, where some form of recognition is a key requirement.

 

Unfortunately the financial crisis has meant employees are less confidence in their ability to move between jobs and hence this has allowed some poor leadership traits, like not giving prise and recognition, to raise its head in many organisations.

 

If you genuinely want to create a positive organisational culture and be recognised as a great leader then you need to know when to say thank you to your employees – not only is it the right thing to do – but the positive impact it will have on sustainable performance might just surprise you.

 

References

 

Eckert, R. (2013). The Two Most Important Words. Harvard Business Review. April

Is Leadership Becoming Distorted Through Its Commercialisation?

If you Google ‘Leadership Courses’ you’ll find about 225,000,000 results – yep, two hundred and twenty five million results from academic institutions to basement ‘trainers’ offering to turn you into a fully-flexible leader, able to lead ‘anything anytime’ through their unique exposure to ideas and theories for a ‘small’ course fee, where with some you’ll actually have a qualification in ‘leadership’ at the end.

 

It’s clear that leadership is lacking in many facets of society, through politics, business, education and sport; and that the majority of ‘people’ around the globe are crying out for leaders to show the way forward – to get their country and/or businesses out of the mess it is in; to create employment; to link education and business; to stop corruption and fraud; and to give people a future for themselves and their children.

 

The problem with leadership is that often the theory doesn’t equate to good practice on the ground. The fact that there are clearly so few really good leaders should give us an inkling that leadership isn’t something you can commercialise for the masses and expect it to work – and that it is something rare and special that is often unique to a specific individual; in a specific situation; over a specific period of time – where the situation and the culture of the people they are leading, plays a significant part in the successful ‘leadership’ equation.

 

The danger of trying to ‘clone and commercialise’ leadership is that successful leaders can be different, to the extreme, depending on the situation – that’s in respect of behaviour; communication; approach; transparency; skills and knowledge – where ‘swopping’ two leaders who are successful within their ‘current situation’ and ‘team culture’ does not guarantee continued success.

 

Leadership is all about people – which is about having a team that will follow you because they want to; in order to achieve a specific objective – where in any specific circumstance a transactional or transformational approach may be required to ‘motivate the team’ to achieve a specific object, within a specific time frame, for a specific cost.

 

If you’ve met great leaders in your career to-date; then you’ll most likely have found that they haven’t learnt their leadership skills through some formal course – but have been ‘natural’ leaders – able to assess a situation and the personnel involved and through some form of tacit mutual agreement form a ‘bond’ to work together, sometimes over a long period of time, to achieve certain agreed objectives; through mutually agreed methods and constraints, for the benefit of all.

 

What you might have noticed with these great leaders is that their success as a leader is not just to do with them; but also the environment in which they are leading; and more importantly the team of people that they are leading as well. A leader may be successful in one situation with one group of people; but then fail miserably in a different situation with a different group of people, where I would suggest that it is the people, rather the situation that has the greatest influence on success and failure.

 

In fact through history the one thing that is clear is that all great leaders have had great followers, immediately below them, who in themselves were great leaders as well – but happy to be an extension of the ‘designated’ leader – rather than looking for individual credit. This second tier of leadership gets little attention in the debate and research of successful leadership – but in my experience they are a key ingredient that makes the ‘ultimate’ successful leadership scenario sustainable for a long period of time.

 

By creating too many people that see leadership as a ‘lead’ position rather than a support position to another ‘good ‘leader; will just add to the current problems with leadership, as they – being part of the problem, rather than the solution - will fail to create the right environment for ‘leadership’ to get the best results from a situation for the best optimal sustainable results. 

 

It’s unlikely we’ll change the ‘fad’ for leadership courses in the short term – but what is vital, if you genuinely want to be a great leader; is that you have to understand your people and accept that though you might be the designated leader – it is a team effort, where success or failure will depend on the ‘team’; and where you will instinctively know when to lead from the front; when to walk alongside them and when to take a ‘backseat’ and let the team ‘just get on with it.’

 

Profit Maximisation: Is It As Bad As Many Think?

Profit maximisation has been taken to such an extreme by too many, short-sighted, myopic  shareholders and organisations that the original concept has been totally distorted; to the extent that the term itself seems to leave a bad taste in one’s mouth and makes most people think of ‘greed’ and ‘unethical’ business. Wherein this scenario the single goal is to drive costs down to such a level that quality and service suffer, sometimes to criminal levels, in the pursuit of corporate profit and maximisation of shareholder wealth.

 

But even though the theory looks at maximising revenue and minimising costs – the theory never purported that this should be done at any cost – and certainly never suggested that profit maximisation was about inferior quality; corporate lies and/or mis-selling; or many of the other organisational behaviours that seem to take place in today’ business environment to reduce costs in the pursuit of their perception of profit ‘maximisation’.

 

There was a time when to try to differentiate between the ‘malpractice’ often exhibited in the drive for profit maximisation – academics and organisations would talk about profit optimisation – implying that optimisation takes place by keeping ‘the parameters of good business’ in place and by focusing on sustainable organisational growth over the long-term – rather than the constant pursuit of profit in the short-term at whatever cost.

 

As a theory ‘profit maximisation’ has been subjected to such corporate abuse that the term only seems to be applied with resentment and scorn by those who witness it as a business principle.

 

Research in 2009, which was developed from survey data gathered from 520 business organisations in 17 countries, found that if a CEO’s primary focus is on profit maximization, employees develop negative feelings toward the organisation. They tend to perceive the CEO as autocratic and focused on the short term, and they report being somewhat less willing to sacrifice for the company. Corporate performance is poorer as a result.

 

The research found that when the CEO makes it a priority to balance the concerns of customers, employees, and the community while also taking environmental impact into account, employees perceive him or her as visionary and participatory. They report being more willing to exert extra effort and corporate results improve (Source: Nathan Washburn; HBR; 2009).

 

But if an organisation is looking for any sustainable profitable growth then they must take their customers and employees into account- it’s just basic business sense.

 

The other scenario is where the organisation is a monopoly; or the organisation supplies essential services and is in some form of collaboration or collusion with other suppliers; or the ‘customer’ has been ‘taught’ that they can no longer expect ethical business and are happy to accept that’s ‘this is’ just the way current business is and there’s nothing they can do about it.

 

So those that have moved beyond ethical business practice to maximise their wealth at the expense of customers, staff and their community have bastardised the theory around profit maximisation to give ‘credence’ to their behaviour – and the customer has in many cases just gone along with it – believing it to be a sign of the times and why we find the world in a financial crisis.

 

But profit maximisation that keeps within the boundaries of ‘sensible and good business practice’; that takes account of the organisations customers, employees; as well as their suppliers, community and shareholders can maximise profit within these confines; and look towards sustainable growth and be proud of their achievements.

 

There are many arguments against profit maximisation – but many aren’t logical statements if extrapolated into the future. For example one argument against profit maximisation is that the organisation is so ‘entrenched’ in its current profit maximising activities that it can’t adapt to a sudden change in the market. Well I’m sorry but if the organisation is genuinely looking to maximise profit, but within the parameters of sensible and good business practice – it’s hardly focused on a maximisation strategy if it isn’t prepared to adapt to market changes.

 

The problem is that shareholder and organisational ‘greed’ and ‘corruption’ have given profit maximisation a bad name – and under these conditions it has no place in the business environment. But an organisation that is focused on sustainable growth along with profit maximisation, while looking after the interests of its staff; customers; community and other stakeholders is the kind of businesses we need – since until there is a radical change in the world we live in – organisations need profit to re-invest in infrastructure; job creation; product and service development; customer interaction; and talent development.

 

References:

 

Washburn, N.T. (2009). Why Profit Shouldn’t Be Your Top Goal. Harvard Business Review. December.

What Have Looks Got To Do With Business?

There are seemingly loads of articles and research that clearly shows that ‘attractive’ men and women earn more than those deemed less attractive.

In a book entitled ‘The Beauty Bias: The Injustice of Appearance in Life and Law’ by Deborah Rhode; she mentions how “physically attractive women and men earn more than average-looking ones, and very plain people earn less. In the labour market as a whole (though not, for example, in astrophysics), looks have a bigger impact on earnings than education, though intelligence - mercifully enough - is valued more highly still.” (cited in The Economist, 27th August, 2011).

Deborah Rhode highlights how “not everything comes easier: good-looking women seeking high-flying jobs in particularly male fields may be stymied by the “bimbo effect” until they prove their competence and commitment. But the importance of beauty in the labour market is far more pervasive than one might think. The same is true in other markets. Women have traditionally traded looks for economic support in marriage. A Chinese study confirms that the husbands of unappealing women earn about 10% less than those of their dishier counterparts. Attractive people also have an easier time getting a loan than plain folks, even as they are less likely to pay it back. They receive milder prison sentences and higher damages in simulated legal proceedings. In America more people say they have felt discriminated against for their appearance than because of their age, race or ethnicity. Pretty people, it seems, have all the luck.”

In another article in 2011 Alan Hall wrote in the Mail On-Line that “good-looking people worried about higher education shouldn't worry. Beauty is every bit as good as a BA when it comes to getting on, a new study says. Researchers at the Leuphana University of Lüneburg in northern Germany have found wages, promotions and perks at work are linked to a person's attractiveness. While looks have long been thought essential for women to climb the corporate ladder, they say, they are even more important for men.”

This is backed by further research, for example, in an article in Forbes Magazine in 2011 Susan Adams comments on research by Daniel Hamermesh that found below-average-looking men earn 17% less than those considered good-looking, while below-average-looking females earn 12% less than their attractive counterparts.

All this research from 2011 is still alive and well today, with an article published in the Mail On-Line on 10 March 2013, where they state that “Men blessed with the good looks to match George Clooney can reap the benefits in the workplace, says a study. Handsome men can command 22 per cent more in earnings than colleagues doing the same job because of their looks. But men with 'below-average' looks will pay the price for their appearance, earning 26 per cent less than an average-looking man in the same job. They were also 15 per cent more likely to be unemployed than more attractive men.”

Of course one may think this is unfair as we don’t choose how we are born and start to look around us at others in our peer group to see if their career path might be influenced by anything other than their performance – but it’s not the peer group you should be looking at – it’s the leadership. It’s a damning condemnation of today’s leadership if they are so shallow that they are influenced by looks when it comes to offering jobs; promotions and other perks.

Maybe this kind of research gives an indication as to why there is such a large pool of immature leadership in today’s global world and if we really want to see improvements in leadership throughout the globe, then this should be a kick-start to those involved in leadership development and leadership appointments to question the success criteria that drives their decision making.  

References

Adams. S. (2011). Does Beauty Really Pay. [On-line http://www.forbes.com/sites/susanaadams/2011/08/03/does-beauty-really-pay]. Accessed 2nd June 2013.

Hall, A. (2011). Looks are as important as brains to career success, a recent study shows. The Mail On-line. 21st December 2011. [On-line: http://www.dailymail.co.uk/news/article-2077056/Looks-important-brains-career-success-says-new-study.html]

Rhode, D. (2011). The Beauty Bias: The Injustice of Appearance in Life and Law. Oxford University Press; USA. [cited in the Economist: http://www.economist.com/node/21526782]