Customer service in the digital age – what changes?

During an exchange on Twitter earlier this year with some folks who were attending #scrmsummit we chatted about customer service and about how costs are a real focus for most customer service activity. Thus, rather than focusing on excellent customer service, most organisations focus on the cheapest and most efficient form of customer service.

But it seems to me the starting point must always be understanding what value customer service delivers to your business.

For most businesses customer service – during the purchase decision making process, during purchase, and afterwards – is critical.

Then the question that a business must answer is: how important is customer service to driving sales, and how important is it to drive repeat business? But it is also necessary to understand what form that customer service ought to take to delight customers.

Based on my experiences as a customer in the ‘real’ world many organisations see me as a bother or an annoyance that gets in the way of something more important. It certainly makes switching to an online shopping context rather easy. Mostly there’s no special customer service person with whom I have a relationship. That lack of a relationship makes switching to another supplier very easy. Especially when the main differentiator is service.

However, a personal relationship is not necessarily fundamental to excellent customer service.

There are a few notable example of this.

Sharon, at the local general store, has built up a great relationship with us. We often choose to shop with her rather than at a larger store in town, even though her prices are slightly higher. Because of the relationship we have (and that relationship might just be in my head, I might actually be just another annoying customer, but she never lets me know that). I often choose to shop there rather than buy something online or at another store.

Net-a-Porter is a great example of how to do online customer service. I have never spoken to them, I just order products online. But if there is a problem with fit the return process is so smooth and easy – usually the replacement item is in my hands within 48 hours of sending the return. No questions asked. This makes me happy.

Another example is the guys who just painted my house (for those on the Sydney north shore KMK Painters = highly recommended). They did a fantastic job. Not because they painted the house (although they did that well). It was the little things like turning up when they said they would, cleaning up really well afterwards, patting my dog when she came sniffing around, and helping me to carry stuff from my car. Those little extras were not part of their core mission – painting the house – but these little extras made them stand out from the last lot of painters. It means they’re top of mind for any more jobs.

Three quite different models of customer service. Each good. Each satisfying in their own way. Each earning and retaining my repeat custom. It seems to me that customer in the digital age does not differ much from customer service in any preceding age.

Some thinkers who have interesting ideas about customer service in the digital age include:

Why do bad leaders happen to good people? #notw #hackergate

There have been astonishing revelations in London about leaders in the News International group of companies and in the UK Parliament. Perhaps even more shocking is the disclosure of the deep and complex relationships between the two groups?

It is a classic case study of power and the old-fashioned dispensation of favour. News International controlled the media, and thus they controlled politician’s access to the power of the media. It was good old fashioned Machiavellian politics of fear and favour.

For years, without the general public realizing it, the leaders of the nation were kow-towing to the powerful masters of the mass media. Democracy as we believed it to be did not exist. Instead electoral success rode on the back of favorable mass media coverage.

It now seems that even the (once respected) leaders of the Metropolitan Police and Scotland Yard were not immune to seduction by power and money from corrupt media players.

Now all this is being laid bare, with systemic criminal, unethical, and idiotic behaviour revealed. The people are seeing the tawdry mess in the light of day. None of the leaders in question come out of this well. Their venality, their cupidity, and their stupidity are on public display.

But the real question is were good people betrayed by bad leaders in business, government and the police? Is society to blame? Do we get the leaders we deserve?

These are important questions for us here in Australia – after all we are an outpost for News International as well. It’s time we started looking into the murkiness of relationships between those players here too. And it’s time we ask ourselves what kind of government and business institutions we want. It’s time to think about how our democracy works. And to consider how mass media can make a mockery of universal suffrage by manipulating messages.

Andrew Crook on Crikey has done an interesting analysis of the Daily Telegraph’s coverage of the current government’s carbon tax versus the Howard goverment’s GST.

Julie Posetti raises some interesting questions for local media organisations to address in her recent post Some #Hackgate Questions for News Ltd and Other Media.

Another recent development in Australia times is industry lobby groups – such as mining companies and cigarette companies – harnessing the power of mass media to promote their own agendas. And through their campaigns they seek to stop governments enacting policies such as the mining tax or plain packaging for cigarettes. Thus the lobbying that once happened behind closed doors has moved out into the public realm.

The media landscape is shifting. The democratization of access to mass media means that others who seek to drive political agendas now have access to the means of production. Power relationships around media are also shifting. As a result these are dangerous times for democracy and for the implementation of long term public policies.

It’s time to stop sleepwalking and blindly accepting the ideas that the proprietors of the mass media want us to swallow. It’s time to ask questions like:

  • What kind of leaders do we deserve?
  • What kind of leaders do we create through our actions and demands as a society?

Also worth a read in this context is an article by Massimo Pigliucci on Al-Jazeera titled Ignorance today: Our world is awash in information – but can we make sense of it?

Bad management, ethics and philosophy: what can we learn from News of the World?

The demise of a 168 year old (and reportedly profitable) newspaper in Britain called the News of the World (NoTW) gives us some valuable insights on a number of levels.

Every day over the past few weeks we have been gobsmacked by the revelations about NoTW and assume nothing could be more shocking.

But then there’s a new revelation about the way NoTW practised its business and we’re even more shocked.

An important insight they offer us is how management practice in the real world is informed by management thinking about business and ethics. And how thinking about business and ethics translates into behaviour in the workplace.

Bruce Guthrie, writing in the Sydney Morning Herald, recounts that in 1988 at a conference of News Corporation editors in Aspen, Colorado:

“I asked about ethics and Rupert called me a wanker”.

This article is interesting because it gives us a view into the behaviour that the top leader in that organisation demonstrated to his senior leaders and managers.

As Guthrie notes:

“I left that conference in Colorado more than 20 years ago concerned that Murdoch saw ethics or, at least, the discussion of them, as an inconvenience that got in the way of the newspaper business.”

When the top leader of an organisation gives that kind of strong message then it is extremely unlikely that any other leaders or managers will explore issues like ethics or managerial accountability. It is also unlikely that exploring those kinds of issues is part of the reward and remuneration structure within the organisation.

Further, it is also unlikely that the business leaders, given that kind of strong message from the top, will ever take the time to consider philosophical issues about management, leadership and the kind of business they want to run for customers, employees or society.

With that kind of leadership message we get a soulless automaton of an organisation that does whatever it takes to deliver shareholder value, no matter what cost to the people involved in the process.

And now, with News of the World, we see the results of that kind of leadership and management.

Where does the buck stop with the kinds of bad behaviour we saw in News of the World? Where did the people at the front line get the message that their appalling practices were okay? What kind of management philosophy was in place there?

news-corp-governance-300x126Perhaps just a quick check of the News Corporation corporate governance page demonstrates their current thinking on corporate governance?

It seems that there are interesting questions for all leaders and managers to ask ourselves arising from this tragic tale of a corporation gone wild.

Most importantly we must ask ourselves “would I have gone along with business practices like those in evidence at News of the World?” – it is easy to say no from the comfort of an armchair and with full hindsight.  More pertinent to consider is the challenge of saying no during the cut-and-thrust of a busy day in the office when your job is on the line?

Social capital, karma and getting things done

I’ve never been a big fan of David Allen’s Getting Things Done® method – all that sorting and categorising of endless lists bores me. But I am a huge fan of getting stuff done. Many years ago after yet another time management course at work I realised that what helped me to get things done was to have a very short list of to-dos everyday.

MerrillCoveyMatrixIn a later course I realised it was an unconscious use of Steven Covey’s notion of assessing tasks in terms urgent/important.

It was then I realised that what I valued was getting stuff done. Not sitting down making lists and categorising. But rather clearly identifying actions that would lead towards achievement of my goals and objectives. Identifying the top three or four things I could do everyday to help to make those things happen.

But many of my goals, both business and personal, needed the assistance and cooperation of other people, and it became clear that social capital was an important consideration.

The bigger the goals the more likely it is that social capital will play a significant part in the process. The big question for getting stuff done is how to marshal sufficient resources (money, people, effort, time). But the next most important thing is how to turn ideas from just my ideas into our ideas. That is, ideas into which a group of people are willing to invest their resources.

This remains true for any group activity. It means that we get things done in a social economy and that we are constantly trading in social capital.

For most activities goodwill and intrinsic motivation are the things that get people involved. Even for projects where there is strong extrinsic reward it is my experience that those rewards do not motivate people in sustainable ways. This is borne out by research by Dan Pink.

We need to build good relationships and share social capital in order to be able to find and maintain collaborators.

Thus lists are only as good as the social capital that can be harnessed to get things done. It means that we need to be storing up goodwill, good karma, for when we need it.

Psychologists talk about the importance of reciprocity . It is interesting to consider how ideas like social capital and reciprocity are important for getting things done.

Innovation: operational excellence is not a path to sustainable growth

I’ve been thinking about innovation a great deal lately and am fascinated by how many people confuse two different kinds of innovation.

The two different kinds of innovation are:

  1. continuous improvement – the drive for operational excellence, which is driven by optimising existing business processes and products (in the Six Sigma world the DMAIC approach is used for this kind of change)
  2. step-change innovation – creating new ways of thinking, new products and new ways of doing things (in the Six Sigma world the DMADV or DFSS approach is used for this kind of change)

It often seems that the revenue and cost impacts of these two different kinds of innovation is little understood.

The former, optimisation, generally has the effect of reducing costs. This is an admirable thing and is always worth doing.

However, I sometimes think that we are in danger of optimising the customer service and humanity completely out of our business operations by focusing so much on cost out initiatives.

The second kind, step-change innovation, is more focused on new revenue opportunities. This is the lifeblood of any business, it is not sustainable to keep taking costs out of the business and merely optimising the existing business and products.

Sustaining innovation within existing businesses is hard. Academics have been researching for years seeking the secret sauce of innovation so that we can pour it into our businesses and succeed according to some formula.

But it is not that easy. Innovation is hard. I’ve done it from inside of large organisations. New ideas are difficult to achieve consensus upon. New products are hard to bring to birth when everyone is already doing well with the existing products. It is hard to get people to buy into change unless there is a substantial reason to get their attention.

Everyone is usually running hard to keep up and to meet the current KPIs and the last thing they need is some crazy innovator trying to stop them from getting business as usual done.

Innovation is risky and entails the possibility of failure.  It is important to ask ourselves how we can make this risky business of innovation work for our particular organisation.   A key factor is how failures are treated.  Another important factor is allowing some time out of normal business to build the innovation idea into reality.

In my experience innovation within a successful existing business is only possible with the help, protection and support of highly engaged senior executives.  Every time I’ve tried it without this type of support it’s been almost impossible to survive the political tension between innovation, business as usual and meeting existing KPIs.

However, there is one certain thing.  Operational excellence and continuous improvement are not the way to grow a business.  But they are a great idea for freeing up some funds to invest in step-change innovation that creates new business models and new products.  Thus it is important for an organisation to make space for both kinds of innovation.

Innovation – does it make sense for business?

Every business book I pick up nowadays seems to accept as a fundamental premise that innovation is a good thing and that it should be pursued relentlessly. But I’ve been wondering about that particular premise and under what circumstances it might (or might not) be true.

Innovation provides us with a dilemma in business. Don’t do it at all and the business will probably die over time. Or others will innovate and leapfrog the business – this is what has happened to Australian retailers (like Gerry Harvey) who have ignored their online channel. Do it too early, too late or too often and it could also damage the business.

A business is setup to measure, monitor and reward people on the basis of performing well in the existing business model, and few businesses are setup to simultaneously manage a disruptive new business model.

Then there is the challenge of innovating while continuing to run a successful business. After all, if the current business is not broken, why would people bother to change? This is a big problem that I have seen many times. Once the need to change is obvious it is often too late and market disruptors are already in play. In many organisations the pressure on getting the most out of the current business model leaves little spare capacity for innovation.

This dilemma of managing both the existing business and innovation at the same time is the great challenge for business leaders of our day. We can see ample evidence of this with the Australian retail industry. Many of the big retailers rested secure in their ‘knowledge’ that online had failed in the dot-com bust of 2000. They ignored the online channel and competitors from overseas have gradually grabbed market share to the point where Australia’s retailers are now crying out for government assistance.

It is interesting to see that, in contrast to the head-in-the-sand approach of many Australian retailers, shopping mall giant Westfield has pursued a diversification into online shopping as well as focusing on their core bricks-and-mortar business. [Disclosure: I used to work for Westfield as part of the digital team.] Thus they have balanced their successful existing business model with innovation.

In the places where I have worked successfully on new products there has been a happy confluence of things that made it possible. Among them were:

  • substantial top-down support from C-level team, coupled with time to educate executives about the idea/product and it’s benefits and risks to the business
  • an active and responsive project owner at executive level who can protect the team and manage upwards effectively
  • adequate resources to get the job done
  • appropriate oversight and governance (but not too much)
  • freedom to get it wrong in the short run, together with focus on getting it right in the long run
  • clear goals, objectives and milestones
  • adoption of agile development methods for software
  • good project management together with adequate reporting to enable stakeholders to gauge progress
  • a small tight-knit team who have a clear sense of mission and purpose

Whenever these things have come together for an innovation project it has been successful. Where these are missing the success has been much more hit and miss. That is not to say that an innovation cannot be brought to market without these things, but it is much more fraught with angst and is much harder for all concerned.

Business leaders really need to think about what internal barriers to innovation exist in their organisations and how to create safe nests for innovation to incubate.

If bad is stronger than good what can we do about it?

I’ve been reading an old article that remains extremely interesting – it is an academic paper dating back to 2001 titled Bad Is Stronger Than Good.

The authors note that:

“The greater power of bad events over good ones is found in everyday events, major life events (e.g., trauma), close relationship outcomes, social network patterns, interpersonal interactions, and learning processes.

… Bad impressions and bad stereotypes are quicker to form and more resistant to disconfirmation than good ones. “

This has profound importance for all of our interactions with family, co-workers, customers, and just about anyone we meet. According to the article a ratio of five goods to every bad is required to minimise the effects of the bad.

From a customer service perspective this means that for every negative impression it is five times harder to make a good impression. Applying some sort of cost/benefit analysis to that idea would likely show that bad impressions are expensive to correct.

The research indicated that “positive independent variables affected positive dependent variables, whereas negative independent variables affected negative dependent variables” or “more simply, good affects good, whereas bad affects both bad and good.”

The authors were even able to put a number on the impact:

“Good can overcome bad by force of numbers. To maximize the power of good, these numbers must be increased. This can be done by creating more goods. For example, in a romantic relationship each partner can make an effort to be nice to the other consistently. Such small acts of kindness are important for combating the bads that will typically occur. Indeed, if Gottman (1994) is correct, the ratio should be at least five goods for every bad.”

This is fascinating stuff and real food for thought. When I start to put it together with some of the other ideas that came up at Social Innovation BarCamp recently there are very good grounds to change thinking, behaviour and actions.

Article reference: Bad Is Stronger Than Good by Roy F. Baumeister, Ellen Bratslavsky, Catrin Finkenauer, and Kathleen D. Vohs; Review of General Psychology 2001. Vol. 5. No. 4. 323-370, download PDF here

Why things don’t change – or the tyranny of ‘THEM’

Over the years I worked as a senior manager in large organisations and, more recently, as an educator and business coach for senior managers across private and government organisations. A fascinating phenomenon that comes up in all of those places is, what I’ve come to call, “the tyranny of them”.

A recurring theme while talking with senior people about how we can enact change within their organisation is a mysterious barrier to change called “them”. Often it is said that “they” would not like the change that is proposed. Or that “they” don’t like that kind of thing.

It is always fascinating to deconstruct who “they” are – these disapproving and negative people. It is especially fascinating because the people who are speaking of “them” are often reporting directly to C-level or Executive Management team.

Why is it that even at very senior levels within an organisation there is a paralysis in the face of change? And why does that paralysis take the form of a fear of “them”?

Think about how many times you’ve used the amorphous “them” as a reason not to do something at work.

It’s time to deconstruct “them” whenever they are called upon to reject action on change. Ask instead:

  • Who in particular will object to this change?
  • Why will they object?
  • Are their objections or concerns valid?
  • What can we do to address them?

Thus to be a successful changemaker one needs to understand the various objections to change, and more often than not realise that “we” are the barrier to change, not “them”.

A new dimension to analysis: Time to include a spiritual angle?

In business school we all learned to use the same analytical tools – S.W.O.T., P.E.S.T., P.E.S.T.E.L., BCG Growth Share Analysis, Competitor Analysis, Porter’s 5 Forces, etc.

But at dinner the other night, while chatting to some “kidults” (as they were introduced by their parents), we discussed the P.E.S.T.E.L. analysis.

This stands for an analysis of an issue in terms of the following factors:

  • Political
  • Economic
  • Social
  • Technological
  • Environmental
  • Legal

It was a joking suggestion from one of the my dinner partners that this analysis was missing an element that got me thinking.  This traditional business school analytical tool is typical of US influenced management thinking.  It is entirely rational.  It does not incoroporate any other perspectives.

I started to wonder, what happens if we add another element to this kind of analysis?  What happens if the last lens becomes:

  • Spiritual?

Not sure about the answer on this. But I am very curious as to how the answers change if we move from a P.E.S.T.E.L. analysis to  a P.E.S.T.E.L.S. analysis approach?