Front Line Employees Hold the Key to Long Term Growth

The strong correlation between Long Term Growth and Employee Satisfaction

I’d like to start this post by asking three quick questions. They all relate to important issues that affect your business.

  1. When was the last time you were delighted when you did business with a service company?
  2. What role did an employee of that company play in the delightful experience?
  3. Do you think you could make a guess about that employee’s attitudes toward his or her job based on what happened?

Even though great service is a rarity these days, we’ve all had at least one experience with a company that really knows how to take care of its customers. In fact, I distinctly remember a small dry cleaner in an area where I used to work. I was so happy with the service, I’d drive halfway across town to give them my business, passing other dry cleaner’s shops in the process.

Why did I go out of my way to deal with them? The employees went out of their way for me. Once, they even made a special, after hours delivery to my house when I needed something in a hurry. They also welcomed me and called me by name whenever I stopped by. That made me feel like they really appreciated my business.

If you place people first, then good customer service and profitability will follow. 

“Employee behaviors and attitudes , even more than leadership principles and ideals, communicate most directly to customers just what the company stands for.”  Fred Reichheld, Loyalty Rules!

When you get right down to it, employees have the power to start a chain reaction that leads to success. Here’s how it goes in reverse. Customer Loyalty drives long-term growth. Customer delight drives loyalty. Appreciation and interest drive customer delight. And guess who’s in the best position to show your customers that you really care about them? That’s right. Front line employees.

Not everyone understands the connection

Despite the obvious importance of employee satisfaction, the great recession has resulted in many companies not placing nearly enough emphasis on developing and retaining employees. Consider these survey results:

  • 84% of employees feel that their workplace is headed in the wrong direction according to a November 2011 survey by Right Management
  • According to a June 2011 study from Mercer, one in two US employees are either actively looking for work or have mentally ‘checked out’

“Diminished loyalty and widespread apathy can undermine business performance, particularly as companies increasingly look to their workforces to drive productivity gains and spur innovation,” said Mindy Fox, a senior partner at Mercer.

Of course, great leaders have always known that taking care of their employees is important. The companies that have continued to make employee satisfaction a priority will come out of the current economic environment stronger and will ultimately put a lot of  distance between themselves and the competition.

If your employees are happy, customers see that, and they respond by giving you more of their business.

Those Pesky Customers by Emily R. Coleman, Ph.D

We all know them:

  • Those unreasonable people who don’t understand business efficiencies and want to talk to a live representative.  And worse, a live representative who actually can speak their language.
  • Those people who don’t grasp the concept of “try, try again,” and immediately call for technical support or complain about the product.
  • Those delusional types who think executives have nothing better to do with their day than solve customer problems.

Doing business would be so much easier if we didn’t have to deal with customers.

Okay, okay.  This is obviously an exaggeration.  Unfortunately, however, not by that much.  Even today, with a down economy, with a rapacious competitive environment, and with buyers who can go elsewhere, customers are seen as a group to be measured and managed.

I recently read a fun article on the subject by Greg Harris.

http://www.jameco.com/Jameco/email/corner/listenandlearnall.html

His position is that “the customer’s voice can serve as a company’s guiding light and everyone on [our] management team makes talking to customers a high priority.”

I’m all for “customer engagement” and matrices to measure it.  I’m all for customer satisfaction studies so you can see where problems lie.  I’m all for “this call may be monitored” to see how employees handle customers.

But mostly I’m for the fact that marketing is about communicating with customers, users, and prospects.  And the best way to do that is to talk to them – and with them – and get to know what actually makes them tick (as opposed to what we think makes them tick).

Therefore, allow me to propose something revolutionary:

Let’s put aside our assigned roles, our job-defined turfs, and our egos.  Let’s agree that no one can claim to be a marketing professional without spending a portion of our day – or our week, or our month – without actually talking to real customers, users, and prospects.  Let’s go out on real-world sales calls.  Let’s spend some time taking the calls customer support reps routinely handle.

Let’s get beyond the numbers.

Keep the matrices.  Keep the market research.  Keep the technologies that, hopefully, make us more efficient.  But as we create our strategies, our tactics, our messages, wouldn’t it be useful to have some personal, gut-level, insight into the people we are trying to reach?

About Emily R. Coleman

Dr. Emily R. Coleman is President of Competitive Advantage Marketing Inc, a marketing firm that specializes in taking small, medium, and large companies to the next level by helping them develop and deepen their competitive edge in the marketplace. Dr. Coleman has more than 30 years of hands-on executive management experience working with companies, from Fortune 100 firms to entrepreneurial enterprises. Dr. Coleman’s expertise extends from the integration of corporate-wide marketing communications to the development and implementation of strategy into product development and branding. Dr. Coleman can be reached at ecoleman@colemanmgt.com.    At LinkedIn:  http://www.linkedin.com/pub/emily-r-coleman/0/5a/714  On Facebook:  http://www.facebook.com/pages/Competitive-Advantage-Marketing-Inc-CAM/223500261070884  At Twitter:  http://www.twitter.com/e_r_coleman

How to Achieve your Strategic Plan: Part 2 of 2

In my last post I summarized the top 4 reasons why Strategic Plans fail. But you don’t get rewarded for predicting rain, you get rewarded for building an ark.  So how do you ensure that you achieve your strategic plans? How do you keep everyone moving in the same direction? How do you get the most out of everyone’s efforts? How do you make sure that every day you take another significant step toward your most important enterprise goals?

Evaluating the winds and currents

When setting direction, you have to examine all of the issues that will have an impact on your journey. You look at the voice of your customers, employees and shareholders to analyze your strengths, weaknesses, opportunities, and threats. This in-depth analysis of information from inside and outside your company is essential for charting the right course in a fast changing world. When conducting this analysis, it is critical to give top priority to customer feedback since every companies future ultimately depends on its ability to serve customers better than the competitors.

As an example, your overarching goals for each of your major constituents could be:

  1. Customer: the “provider of choice” as measured by customer delight
  2. Employee: the “employer of choice” as measured by employee satisfaction levels
  3. Shareholder: #1 in Shareholder return
  4. Community: “highly valued member of community” as measured by philanthropic contributions

Measuring your progress

Once you’ve established your overarching goals, you need to make sure that you develop strategies that really drive the business forward. I like to use the “rule of 3” – no more than 3 major strategies for each identified goal. You will also need to develop concrete metrics with breakthrough objectives for each strategy that can be monitored on an ongoing basis, like a speedometer or mileage gauge.

As an example, one of the strategies that you establish to become the “employer of choice” could be:

  1. Retain the best employees. We will retain outstanding performers at every level of the region by developing a spirited, team oriented culture and work environment that combines exciting professional challenges with opportunities for professional growth.
    • Performance Metric: Employee Retention
    • Current Performance: 82%
    • Benchmark: 95%

Turning long-term strategies into short-term tactics

OK. You’re making progress because you’ve defined clear-cut goals, strategies and metrics for the entire company. Now it’s time to analyze the gaps between current performance and the benchmark by utilizing tried and true quality tools and six sigma to develop improvement initiatives to close the gap.

  1. Retain the best: Using my “rule of 3” again, identify the top 3 tactics to close the gap in the coming 12-18 months. NOTE: Just as with strategies, choosing more than 3 tactics greatly diminishes your chances of making any progress due to resource constraints, lack of focus, etc.
    • Recognize and reward outstanding performance at every opportunity.
    • Create an inspiring and competitive team environment by establishing bold objectives and enabling employees to achieve them.
    • Sharpen focus on results by sharing and publicizing them throughout the region.

Getting everyone on board

Once you have identified the tactical plan for the upcoming year, you need to deploy the objectives throughout the organization using a concept called the “time span of control”. For example:

As the leader, you are focused on delivering the year.

→ Your management team has to deliver 4 good quarters to achieve the annual objectives.

→ Their team has to deliver 3 good months every quarter.

→ The front line leaders have to deliver 4 good weeks every month.

→ And each employee has to deliver 5 good days each week.

Approaching deployment of your objectives in this manner ensures that everyone in the company knows how they connect to the strategic goals. It also identifies the budget required to achieve each tactic and it identifies where your incentives are mis-aligned.

Going back to our “employer of choice” example, one of the tactics to “Retain the best” was to recognize and reward outstanding performance. Formalizing this tactic could be as simple as an agenda item in every front line leader’s weekly meeting or an employee of the month program. Establishing a budget for the reward program is also important.

Developing a simple document to serve as your compass

When you complete this integrated planning process, you publish a simple straightforward, three-page document that lists your vision, goals, strategies, and top priority tactics. It also includes a scorecard for tracking progress to the goals.

This document becomes the official company-wide strategic plan that sets the direction each year. Another thing, everyone gets a copy. It’s short, crisp, and it’s meant to be that way. After all, the goal isn’t to list every activity at your company. The purpose is to help everyone focus on the top priorities for the upcoming year as you journey to your five-year goals.

Results-oriented management process

While winning strategies and tactics are important, you can never forget that the best plan in the world is only ink on a page. The real challenge comes in putting the plan to work – and making it work. You need to implement a disciplined way to convert this good work into breakthrough results. This is where the “time span of control” comes in handy again.

Each management level described above has to develop a management process around their “time span of control” to ensure that you have chosen the right tactics and they are delivering the predicted results.

Just as before, the objective is to deliver the annual objectives as part of the 5 year plan.

→ Every Quarter the Board and the investment community requires the leader to provide a status to ensure progress to the annual objectives.

→ To ensure those quarterly calls go well, you need to conduct Monthly Operational Reviews with your Management team to make sure they deliver 3 good months.

→ Your Management team establishes, for example, weekly Sales meetings to ensure that they deliver 4 good weeks.

→ And each employee knows what they have to do each day to ensure they deliver 5 good days.

Summary

The reason this approach works so well is that it addresses the four reasons why strategic plans typically fail as I outlined in the first post. The simple communication document ensures every employee knows the plan. The results oriented management process keeps the management team focused on performance against the goals. And lastly, the “time span of control” formally deploys the goals, identifies budget needs, and establishes the right employee incentives.

Following the “rule of 3” keeps the plans focused, short, and crisp. This limit on strategies and tactics will also force your organization to focus on the few things that will move the needle the most.

The Difference Between Service, Satisfaction, & Loyalty

In an attempt to create a loyal following, Leaders are often disappointed because they confuse the concepts of Service, Satisfaction, and Loyalty. While error-free service and pleasant interactions are key components to any product offering, loyal customers are the only ones that can help you grow your business (see Raising the Bar on Customer Satisfaction http://wp.me/p28Mqi-7) and create the environment that leads to continued innovation.

A quick story that illustrates the differences between Service, Satisfaction, and Loyalty:

SERVICE

Mr. Smith walks into a banking center with tall pillars, marble, mahogany teller windows – he could feel “money” in the air. Then he saw a maze with 10 people in line. Since there were 10 tellers, he figured he was 2nd or 3rd in line. So far so good.

He came to the head of the line and looked to the right. Then he heard a woman shout from the left “NEXT!” As he approached the teller, she was looking down – but when she looked up, he was certain that she hated him.

When he asked for change for a $50, she quickly counted out the change, handed it to him, and yelled “NEXT!”

He checked his change, and it was correct – No Defect!

SATISFACTION

Now what if at the head of the line he heard “Could I please speak to the next gentlemen in line?” He was given correct change and was thanked for coming.

This is satisfaction.

LOYALTY

Even better, what if at the head of the line he heard: “Mr. Smith can I help you?” When the change was counted out, he was handed $45 in change and 5 silver coins because “I know you collect them.”

This is Loyalty.

LOYALTY FUNDAMENTALS

Of course there is more to earning a customer’s loyalty, but there are some fundamental truths that cut across industries:

  1. A great product is reliable and personal. This means no defects, timely delivery, and delivered with appreciation and care for the customer.
  2. A brand is a promise. If a company doesn’t keep that promise in every interaction, they are not seen as trustworthy. If they aren’t trustworthy, they are seen as liars which ultimately chips away at the brand.
  3. Employee Engagement. Every employee in the company knows the values top to bottom and the values are aligned with the customer’s needs.

In addition to more referrals and expanded share of wallet, employees discover unmet customer needs when their primary focus is delivering a great experience. These unmet needs are the seeds of innovation that ultimately keep you ahead of the competition.

Key Drivers Ed: How to find opportunities for big improvements in Customer Delight

“Knowledge is the process of piling up facts; wisdom lies in their simplification.” – Martin H. Fischer, American Scientist, educator, and author

Focusing on Customer Delight is an admirable goal, identifying the specific issues that have the biggest impact on the customer experience is where the real work begins.

I call them “Key Drivers” of delight and dissatisfaction.

Drivers of delight are outstanding service or product related features that help build customer loyalty. Drivers of dissatisfaction are problems and other shortcomings that damage your relationship with customers.

Finding these drivers is one of the most important steps in the entire business improvement effort. Because once we identify the drivers, we can develop targeted initiatives to increase customer delight and eliminate customer dissatisfaction.

These improvements in turn, boost customer loyalty, decrease attrition, increase share of wallet and generate favorable word of mouth advertising, which helps attract new customers.

A brief introduction to drivers inspired by my refrigerator

Let’s consider the impact of a common household appliance – the refrigerator – on delight and dissatisfaction.

When I take the milk out of the refrigerator, I don’t say, “Wow! That’s cold. Isn’t that great?” And I don’t sing the praises of the manufacturer either, because I expect the milk to be cold. That’s why I bought it in the first place. In other words, the refrigerator isn’t a driver of delight, because its just doing it’s job. And that’s exactly what I expect.

But what happens if the refrigerator goes on the blink? The unexpected failure is going to spoil the milk and make me very unhappy. If I go to the extreme, I will probably never buy anything else that carries that brand again — whether it’s a stove, microwave, vacuum cleaner, or anything else.

From the manufacturer’s standpoint, that’s bad enough. But the situation can get even worse. After all, I will probably tell friends and family members about my unhappy experiences with the refrigerator. And some people I talk to avoid that brand in the future too.

That gives you some idea of the huge impact drivers of dissatisfaction can have on customer loyalty, word of mouth advertising and the bottom line.

Drivers change with the times

Now, let’s turn back the clock, and you’ll see a different side to the refrigerator story. After all, when the electric version of the icebox first hit the market, people were delighted. Even if it didn’t work perfectly all of the time, it was still a driver of delight, because it provided a new exciting, time-saving convenience. As the years passed, however, reliable refrigeration became so commonplace that it lost its ability to delight people.

So what happened? Manufacturers add icemakers, cold water taps and other bells and whistles. And for a while, each of these innovations did cause customer delight. Then they too became commonplace features that met – but did not exceed – customer expectations.

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