What's Worse Than Making the Wrong Decision?

Effective organisations run like well-oiled machines, where each ‘cog’ in the organisation work efficiently as part of one massive operation to meet some predetermined objective or objectives. There are millions of combinations of management and operational processes that can be employed, and hence each ‘cog’ needs to know exactly what they have to do to contribute to the overall ‘plan’, what their parameters are, time lines, responsibilities etc. 

However the beauty of an organisational ‘machine’ is that it can change and adapt over time to stay effective and become the best it can be to meet changing objectives and challenges within its business environment. 

To be effective this organisational machine needs to make decisions, some will be strategic and more long term, made by management and executive teams; and others will be operational and made on a day-to-day basis as the needs arises, but within the overall strategic framework. 

An effective organisation is a ‘thinking’ machine where each ‘cog’ has a voice and specific, often unique, knowledge and input to ‘share’ with their organisation – this is where the culture is formed and innovative ideas developed that can change the course and performance of the organisation for the benefit of all their stakeholders.  

For a motivational, innovative culture decisions have to be made – some decisions may have to be made without or in advance of collecting all the data and facts – but decisions have to be made. Sometimes decisions will be wrong – but the advantage of making them in the first place is that it will give clarity and direction to a ‘problem’ - where through the implementation of the decision the organisation will quickly see that they are wrong and will adapt and change accordingly – well at least the well run organisations will….. 

The one thing worse than making the wrong decision is not making a decision at all! Although it may appear to the ‘decision maker’ that by not making a decision ‘they’ are keeping the status quo for now – without that formal communication process back through the organisation that says ‘No, not now’ or ‘No, and a reason why’ – the organisation and those that came up with the suggestions are left wondering and unsure of what is the best thing to do. 

Decision makers that don’t make and communicate decisions are often blindly unaware of the negative impact they have on the culture of their organisation, the confusion it causes and how it stifles innovation and creates disharmony and demotivation.

Employees at all levels should be encouraged to come up with ideas that will help the organisation – and it should be every organisations desire to create that kind of culture. But when they do decisions need to be made and communicated back – if it’s a bad idea, then tell them why – so that they know for the next time or maybe they have a counter suggestion – but it’s all part of ‘on the job’ development. If it’s a good idea, but it’s not appropriate now or the company can’t afford to implement it now – tell them and look for alternative ways to make the change. 

But don’t ignore suggestions – whether good or bad. Always have the courtesy to give face-to-face feedback – no emails saying ‘thank you for your suggestions’. Always recognise employees or stakeholders who makes suggestions that they believe can make a positive difference; and once you’ve ‘made your decision’ then have the courtesy to give them feedback – and if you can’t give them feedback for a few weeks or months – let them know you’ll get back to them within a certain time and why it might take that long. 

The worst kind of decision is ‘no decision’ – and it can destroy the fabric of an organisations culture cutting off feedback and ideas.

How Do You Set Expectations at the Right Level?

We all have different expectations for everything we do – some are very consciously calculated and others more subconscious, but our ‘expectations’ affect our lives on a daily basis. So how we create and respond to our expectations will have an impact on our lives in general. Expectations impact everything, from our personal relationships and our day-to-day interactions with others (in and outside work) to how much we enjoy eating out or enjoy a holiday and yet we rarely seem to review and assess how realistic our expectations are.

We all know how different people have completely different expectations for exactly the same activity – in fact there isn’t one ‘activity’ that everyone has the same expectation for. So how do we deal with this in business and how do we minimise discrepancies in expectations.

Getting expectations ‘right’ has an impact on how we optimise the efficiency of effort and ‘enjoy’ what we are doing. But this doesn’t mean that we can simply lower our expectations on everything, so that we’re always ‘happy’ – because expectations are linked with standards and ethics.

Lower expectations too far and standards start to drop, which can start a total decline in standards and/or values. But, similarly at the opposite end, if your expectations are too high then you’re likely to be constantly disappointed, which from a leaders perspective means that you’ll be constantly unhappy and your staff are likely to be constantly demotivated – which leads to a decline in performance and a loss of respect for the leader.

Expectations are ‘created’ through personal knowledge, experience, as well as feedback from others (that we may or may not trust, i.e. sometimes we can be misled leading to incorrect expectations – like when you watch a movie trailer, which leads you to have high expectations for a movie that you then end up being disappointed with).

So in business the word ‘expectations’ gets mentioned quite a lot; in describing meeting customer expectations, or staff expectations, for example, or how a vision creates an expectation of a future state – but how well to we manage the ‘creation’ of expectations in the first place and are leaders and organisations as a whole doing enough to align ‘expectations’ throughout the organisation – both from an internal and external perspective.

If not, then an organisation mustn’t be surprised when either customers become confused with the level of service they receive or different departments and/or individuals have different perceptions about how well they are meeting the organisations expectations of them, leading to different levels of perceived operational efficiency (which can cause chaos when it comes to appraisal time and an employee thinks they’ve met expectations and their boss has a different perspective).

So executives and managers need to spend more time clearly defining and aligning expectations in their organisations – where expectations are a two way street. This has a significant impact on a multitude of activities and factors within a business; which strangely are rarely discussed, except in the very best organisations – for example, discussing what is expected to be required from an organisation (at the individual level) to reach the ‘vision’ and, just as importantly, what the expectations are once the vision has been reached.

If these simple expectations aren’t discussed organisations mustn’t be surprised when in reaching a specific objective, the leadership is ecstatic, but their staff are demotivated and disappointed; as this will simply be because expectations have not been aligned and discussed. 

The reader will probably think that the points raised are simply common sense – yet in our day to day lives much of our disappointment, demotivation and even conflict is caused by non-alignment of expectations. How many ‘arguments’ do you have in your personal life that can, in the end, be simply put down to a difference in expectations? And how once expectations are discussed and aligned life becomes much smoother; whether it’s agreeing about household chores, to who’s going to get the take away on the way home, to what shade of white the wall is going to be painted.

As individuals we, too often, project our expectations on others, assuming that since these are our expectations, they must align with the other parties – and are often shocked to horrified when these expectations aren’t met and even more shocked when we find the other parties expectations were nowhere close to ours - where this leads to disappointment, mistrust and even anger.

So to make your life easier, whether a leader or a staff member, always take the time upfront to discuss expectations with the other individual or group for any task you are involved with – this will ensure expectations are aligned, (which through the process  may even lead to a restructuring of the task, for the better). And as a leader, when you’re selling your vision of the future, take the time to discuss expectations with everyone involved, to ensure that everyone has the same expectations from the outcome and the process.

Is the Customer Always Right?

Leading organisations are now ensuring that customer satisfaction becomes a critical success factor in their corporate strategic plans; where in the past, many executives would simply trust that improving customer satisfaction would lead to improved company performance. Today, executives have access to detailed research studies from 1990 to the present that have shown that higher levels of customer satisfaction lead to greater customer loyalty, which in turn has a positive impact on profitability. Other studies, over the same period, have also shown that satisfied customers also improve organisational growth and profitability by ‘introducing new customers’ through the influence of ‘word of mouth’ in conversation with friends and neighbours, (Homburg, Koschate and Hoyer, 2005, p.84).

Customer satisfaction relates to the comparison of the customer experience and the expectation; where it’s worth noting that there is a difference between focusing on ‘transaction specific satisfaction’ and ‘cumulative satisfaction.’ As Homburg, Koschate and Hoyer (2005) state, “transaction specific satisfaction is a customer’s evaluation of his or her experience with, and reactions to, a particular product transaction, episode, or service encounter; and cumulative satisfaction refers to the customer’s overall evaluation of a product or service provider to date,” (p.85).

Customer’s experience dissatisfaction when their product or service experience falls short of their expectations. This links to ‘disappointment theory’, which states that the greater the disparity between outcome and expectations, the greater the customer’s disappointment or elation.

This theory and the whole concept of customer satisfaction assumes that the customer’s expectations are correct in the first place. But is the customer always right and whose fault is it if the customer is, in fact, wrong? What if the customer’s expectations are incorrect?

99% of the time the organisation is at fault, and it is up to the organisation to ensure two key things; firstly that they interact with their customers to understand their expectations and second, that they are in a position to change those expectations when they are unrealistic. This also highlights the common principle of under promising and over delivering, not on a once-off, but on a continuous basis.

Jay Kandampully highlights that, “customers are becoming increasingly critical of the quality of service they experience. Customer demand and competition are forcing firms to cut loose from the traditional customer satisfaction paradigm, to adopt proactive strategies which will assist them to take the lead in the market place,” (p.431). Also, an organisations growth is highly influenced by its ability, not only to maintain but, to grow a loyal customer base – where one ratio that should be used to measure customer service is an organisations ‘returning customer ratio.’

With this in mind it has become critical for organisations to focus on customer service way beyond the short-term financial goal to the long-term relationship and loyalty value. The relationship value paradigm between; the customer and employee; the customer and the organisation; the employee and their organisation; the organisation and collaborative partnerships; has now become a significant factor in sustainable success.

Your customer’s expectations and perceptions are formed, in most cases, from the interaction the customer has with your front line staff. If these front line staff give the wrong expectations, real or perceived, then you can’t be surprised if your customers are dissatisfied with their experience. As Kandampully highlights “service management literature has repeatedly emphasised the importance of the human element in the delivery of superior service. Moreover the human propensity for the delivery of superior service is greatly enhanced by continuous service innovation,” (p.434).

Customer’s expectations are not only formed at the point of service contact, but also through your marketing strategy as well. Kandampully highlights how “management has failed to understand that the true purpose of marketing is to build and maintain relationships (bridge) between the producer and the customer thus reinforcing the producers promise and, ultimately, the bond between the producer and customer. There has been a change in the focus of marketing: transactional marketing emphasises the individual sale, whereas relationship marketing is designed to affect a long-term, on-going relationship,” (p.437).

In conclusion “the most successful service companies emphasise employees’ personal attention as the pre-eminent factor for service delivery. A firm’s relationship with its customers is instigated and established by the service personnel who interact with the customer day in and day out. It is the service personnel’s commitment to seamless, consistent and superior service that enables the firm to create an emotional, lasting, loyal relationship with the customer in which personal interaction assumes centre stage,” (Kandampully, 1998, p.438).

So is your internal and external customer always right? Yes, they should be and it’s your responsibility to make sure they are, through;

1) Actively listening to your customers needs and expectations;
2) Giving the customer the right message in the first place;
3) Proactively keeping the customer updated with new product and/or service developments; and
4) Where your customer’s expectations are unrealistic, for whatever reason, it is your responsibility to change these expectations through focused dialogue and accurate marketing and public relations.

References:

Homburg, C., Koschate, N. and Hoyer, W.D. (2005) Do Satisfied Customers Really Pay More? A Study of the Relationship Between Customer Satisfaction and Willingness to Pay. Journal of Marketing, Vol. 69, p.84-96.

Kandampully, J. (1998). Service quality to service loyalty: A relationship which goes beyond customer service. Total Quality Management. Vol. 9, No.6, p.431-443.

Six Essential Steps for Effective Internal Customer Service

“In business, as in life, you can often find a multitude of reasons why you shouldn’t do certain things you know to be right. The solution is to concentrate on the one or two reasons why you should.” Nigel Brownbill

Nowhere is this quote more true than with individuals and organisations trying to embrace the basic principles of internal customer service, especially as “it is widely accepted that internal customer satisfaction is a driving force in the achievement of external customer satisfaction, which is critical to the long-term success of any organisation” (Jun, M. and Cai, S., 2010, p. 219)

Organisational leadership needs to help employees understand their internal relationships in respect of internal customer service and how to make it effective. Following these six simple steps will add immediate value to your job and your organisation;

1. It’s the organisations responsibility to ensure they have the right people in the right positions – at all levels.

2. Organisations don’t need you to be best friends with the employees in the departments ‘down the corridor’, but they do need you to work professionally together, day after day, developing internal customer relationships.

3. Successful internal customer service relationships are developed in a climate of collaboration where the customer expectations are based on organisational requirements (rather than personal) and where the parties work together to find optimal business solutions.

4. Providing internal customer service becomes the rule not the exception. Internal customers do not misuse their position of perceived power, preferring to work with their internal service providers to build a climate of mutual understanding and respect.

5. Communication – Communication – Communication. The internal customer service relationship is all about continual and effective communication, where the internal customer is communicating their realistic needs and expectations (and how these may change from time to time due to organisational priorities) and the internal service provider is continually providing feedback on performance, constraints and opportunities.

6. The win-win solution is taking the professional ‘high-ground’ and accepting you can work within a business environment, where you collaborate and work with your respective internal customer or service provider. This will be rewarding both for the organisation and more importantly for you, where your working environment will be significantly more enjoyable than the alternative.

In conclusion it’s worth remembering that an organisation is made up of a group of diversified individuals who need to work together in the most efficient way to ensure the organisation optimises its current and future potential. The customer – service relationship can often be misunderstood as a hierarchical relationship where the internal customer can place unrealistic demands on their internal counter-part (and visa-versa). However we know from external customer service that if a customer places unrealistic expectations on an organisation, it will lead to a break down in the customer-service relationship and will have a detrimental impact on an organisations performance.

So it just requires individuals, such as yourself, to embrace these simple steps which will improve internal customer relationships and in doing so, increase your levels of job satisfaction; a win-win for everybody.

References

Jun, M. and Cai, S. (2010). Examining the relationship between internal service quality and its dimensions, and internal customer satisfaction. Total Quality Management, Vol. 21, No. 2, p. 205-223.