Category: Communication

Employee Satisfaction Leads to Customer Satisfaction (and Big Profits)

“Companies with strong consumer branding outperform Standard & Poor’s index.  It’s a lesser known fact that companies with a high rating from both consumers and employees double that return.”
Carol Parish, Enterprise Global Brand Agency

Employee Hierarchy of Needs

Employee Hierarchy of Needs

I actually considered calling this post, “If mama ain’t happy, ain’t nobody happy.” In the same way that mothers are often the key connector in familial relationships, employees are the key connector in the relationships between a company and its customers. As a result, if our employees aren’t happy, our customers won’t be happy with our companies and our companies won’t be happy with the business results.

For some reason, the topic of employee satisfaction has come up in a multitude of conversations I’ve had lately. I recently had a great one with my most excellent colleague at ForeSee Results, Maggie Kalahar. Maggie had this to say:

“Employees shape the experience a customer has with your company each time they have contact, making employees the most memorable voice of your brand as they constitute the actual brand Maggie Kalaharexperience.  It’s people who ultimately deliver your brand promise.  It does not make a difference what you tell your customers about your brand if those who actually encounter the customer don’t deliver the values consistently.  For example, one poor experience with a rude sales associate at Retailer X can undo millions of dollars of brand advertising touting “The Friendly Faces of Retailer X”.  On the other hand, when employees deliver a positive experience consistent with your brand promise, your customers will in turn become stewards of your brand as well, translating to dollars for your company.”

Given the huge importance of satisfied employees in the overall success of a company, it’s surprising that more attention isn’t paid to employee satisfaction as a key financial driver. (And by the way, I’m certainly not guiltless. Sadly, it’s taken me way too many posts about other topics before getting to this important topic.)

All too often, we take our employees and their job satisfaction for granted. We focus all the power of our Type-A personalities on achieving financial results, acquiring new customers, launching new businesses, and driving customer satisfaction, but too often we forget about the people who actually turn all those action verbs into real-life actions.

We spend lots and lots of time considering our brand messaging, and we even spend a lot of time teaching our brand stewards (our front line employees, in particular) how to message our brand. But how much time do we spend ensuring our employees have the tools and the environment they need to effectively deliver our brand promises (as well as the actual desire to deliver the brand promises)? Sure, HR probably talks about it all the time, but this is not an HR issue.

This is really about the basic service every manager in an organization should provide to his or her staff in order to achieve those financial goals.

I previously mentioned putting employees first (even before customers) as one of the keys principles of a customer centric organization. The base principle is really the same as when flight attendants advise us to put the oxygen mask on ourselves before assisting our children. If we don’t provide a productive, positive environment for our employees, how can we expect them to provide the right environment for our customers?

But, man, satisfying employees is hard!

Providing the type of consistent environment required to really satisfy employees is actually a lot harder than providing the type of experience that satisfies customers. The reality is employee relationships are more interdependent, frequent, intense and intimate than the relationships we have with even our best customers. And we have so many more interactions with employees, any one of which can potentially derail the relationship if we don’t handle it correctly.

So what do we need to do to satisfy employees?

In my experience, the things that make the biggest differences are not parties, free lunches or even bonuses. Those things, while good and worth doing, are fairly temporary. They come and they go and they can be quickly forgotten if there are problems in the basic working environment.

I think the tenets of great working environments are really more akin to Maslow’s Hierarchy of Needs. Maslow’s pyramid starts with physiological needs and progress through safety, belonging, esteem and ends with self-actualization.

The Employee Hierarchy of Needs, if you will, contains a similar progression to ultimate satisfaction:

Basic tools
Certainly, a company’s employees need to have the basic tools to do their jobs. Those tools could be computers, uniforms, office supplies, etc. I don’t think many companies have big problems at this level. I would even add being paid a fair wage here. There can be little question that pay is an important aspect of any job. But getting the pay right is part of the very basic level of the working environment.

Trust and Respect
Trust and respect are the foundation of pretty much all successful human relationships, and it’s certainly no different in employee relationships. One of the best ways to assess the levels of trust in an organization is to examine assumptions regarding intentions. Do policies and procedures seem to assume the employees act on their best intentions or their worst intentions? In other words, are the policies in place mostly to ensure employees don’t do things they shouldn’t do, or are the policies in place to ensure employees have the right environment to do the things they should be doing.

Respect can certainly be gauged by how we treat each other. Do we follow the Golden Rule? In the workplace, one of the best ways to test Respect is in how input is heard from various members of the team. Are people’s ideas, when presented with thought and backed with supporting evidence, taken seriously? For the record, I don’t think “taken seriously” necessarily means the ideas are always accepted and implemented. However, if the idea is ultimately rejected, it should be rejected with the same or better level of thought and supporting evidence. To me, that’s taking an idea seriously and respecting the generator of the idea.

Matching the “A”s
This one is critical, and a mismatch here is often the source of some of the biggest problems I’ve seen during my career. The “A”s are Accountability and Authority. Many positions have job descriptions, but I’m talking about something a lot more specific and meaningful. I’ve found it’s critically important to be very, very clear about what each and every person in the organization is accountable for. This takes a lot of careful thought. Once we’ve defined those accountabilities, we have to ensure each person has the authority to deliver those accountabilities. This is hard. Accountabilities will inevitably overlap in some areas, particularly in hierarchies in the organizational structure. So the accountabilities need to be defined specifically and conflict resolution paths must be predefined. (Frankly, this could be a whole separate blog post…and maybe it will be.)

All of this is made much easier if the company has the types of vision, values and objectives frameworks I discussed in a recent post. Such a centrally defined framework provides the types of guidelines for decision-making that, while not eliminating conflicts and disagreements, at least provides a solid basis for debate and resolution.

Confidence
With a solid framework for decision-making, clear accountabilities and matching authority, employees can begin to make decisions about their daily work with confidence. As those decisions become more and more effective, employees become more self-confident. I’ve always found that self-confidence is the key to success in all aspects of life. Self-confident staff find it much easier to do what’s right for customers and for the business.

Training/Knowledge/Growth
The final layer of employee satisfaction is all about growth. Companies that invest in their employees’ growth will not only have happier employees, they will have more productive employees who generate better and better ideas for improving the company. This means mentoring employees, training them in areas even beyond their current scope of responsibilities, being more transparent about aspects of the business that are interesting to particular employees and more. Creating more skilled and more knowledgeable employees has an extremely high ROI.

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Focusing and delivering on all layers of the Employee Hierarchy of Needs can lead to the type of employee satisfaction that leads to customer satisfaction and big profits (investor satisfaction?). But there’s no question that it takes constant focus and a lot of hard work.

Behavioral economist and author Dan Ariely, in his excellent book The Upside of Irrationality, ran some interesting experiments around meaningful working conditions. He found that “if you take people who love something…and you place them in meaningful working conditions, the joy they derive from the activity is going to be a major driver in dictating their level of effort. However, if you take the same people with the same initial passion and desire and place them in meaningless working conditions, you can very easily kill any internal joy they might derive from the activity.”

We’ve all encountered employees of various establishments who’ve had their joy killed. They’re not productive and they don’t provide great experiences. We certainly want more for our teams and our companies. The alternative of course, is joyful employees, customers and investors. That’s a happy world I want to live in!

What do you think? How would you describe the Employee Hierarchy of Needs? What have you seen work and not work in your organization?

Blinded By Certainty

blindfoldedIn reality, very little in our lives is absolutely certain. We can be certain the sun will rise in the east and set in the west. We can be certain death will follow life. And we can be pretty darn certain Steve Jobs will wear a black turtleneck and jeans at his next public appearance.

But we’re certain about a lot more things than we should be.

A recent University of Michigan study by Brendan Nylan and Jason Reifler shows that the more certain we are about particular ideas or situations the more we become blind to facts that discredit our certainty. In fact, in many cases opposing facts are not just ignored but actually strengthen our prior beliefs.  A recent Boston Globe article provides an excellent summary of the research.

From the article:

Most of us like to believe that our opinions have been formed over time by careful, rational consideration of facts and ideas, and that the decisions based on those opinions, therefore, have the ring of soundness and intelligence. In reality, we often base our opinions on our beliefs, which can have an uneasy relationship with facts. And rather than facts driving beliefs, our beliefs can dictate the facts we chose to accept. They can cause us to twist facts so they fit better with our preconceived notions. Worst of all, they can lead us to uncritically accept bad information just because it reinforces our beliefs. This reinforcement makes us more confident we’re right, and even less likely to listen to any new information.

Both the research and the article focus primarily on our political viewpoints, but while reading I couldn’t help but think of people I’ve come across in the business world who were unbelievably certain about their viewpoints based on information or experiences that seemed less than obvious to me. I immediately thought of dozens of people, and I bet you’re thinking of many such people now.

In fact, it was so easy for me to think of other people that fit the bill that I couldn’t help but think the man in the mirror was not immune to this universal human fallacy.

In my experience in the business world, we often assume with undue certainty that past experiences will reflect future possibilities. We say things like, “We tried that before and it didn’t work” or “I know what our customers want.” While our past experiences are extremely valuable and are very important for informing future decisions, we simply don’t have enough of them to blindly ignore changes in circumstances, timing and other variables that could significantly alter results for a new effort.

So how do we overcome our natural instincts in order to make better business decisions?

  1. Be aware of the problems with certainty
    You’ve read this far, so maybe you’re awareness is already active. I know that I am reassessing all the things I “know” to try to truly separate what is fact and what is assumption. I very much value all my experience, and I know I make better decisions because of what I’ve seen and heard along the way. But I want to make doubly sure that assumptions I make based on past experiences are tested and validated before I turn them into absolute fact.
  2. Actively seek alternate points-of-view
    In my experience, the combination of multiple experiences provides a much more solid foundation for decision making than basing decisions on singular past experiences. Techniques I’ve used, like The Monkey Cage Sessions, are based on the incorporating viewpoints from people in different functional areas and levels of the organization. While it’s acceptable to discount data or opinions that are in opposition to a decision I might make, I want to be sure I’m not simply rationalizing opposing information or viewpoints solely because they are different from my biases.
  3. Envision alternate scenarios
    I addressed this some in a previous post, “Obscure and pregnant with conflicting meanings”, where I discussed a technique I called “Scenario Imagination.” I’ve since read an excellent interview with Daniel Kahneman and Gary Klein where they detail a similar and better technique they call “pre-mortem” (which is also a better name than mine). Whenever we make decisions, we have a tendency to assume our decisions are going to produce the best possible results. These pre-mortem techniques have us imagine worst case scenarios to try to dissect potential problems before they occur.
  4. Be flexible and plan for contingencies
    Once we admit we’re not 100% certain, we can move forward with plans that are flexible and able to react to changing conditions. To be clear, I’m not saying we should just be wishy-washy and not make clear decisions. What I’m saying is that we should be open to new facts and be sure we have created an environment that allows us to change course when warranted.

If we’re aware of our certainty biases and take active steps to address them, I believe we can significantly improve our decision-making in our businesses.

What do you think? Upon self-examination, have you turned beliefs into facts in your mind? How would you suggest addressing these biases? Or, do you think is all a load of hooey?

Don’t let your brand go LeBron

In case you missed it, last week NBA superstar and Cleveland-area native LeBron James elected to leave the Cleveland Cavaliers in favor of the Miami Heat. He announced his decision midway through an hour long, nationally televised special conceived by his team of personal advisers. It all came across as incredibly self-absorbed and spectacularly anti-fan as he essentially broke up with Cavaliers fans in front of a national audience. He repeatedly referred to his decision as being about “business” and hoped his fans would understand.

But they didn’t understand.

When shown an image of fans burning his jersey, James seemed temporarily startled before stating that he couldn’t “get involved in that.” His Sports Q rating, which determines an athlete’s popularity and advertisers use to determine whom to endorse , was the highest in the NBA pre-announcement, but it’s sure to take a hit now. In fact, this post calculates a drop in Q score could cost him as much as $150 million.

But what does this all have to do with retail?

I think there’s a lesson we can all learn about dangers of making business decisions without fully considering the effects of those decisions on our customers. After all, our businesses wouldn’t exist without our customers, and we continue operations at their pleasure.

We’ve probably all been in those meetings where a suggestion motivated by self-interest groupthinks its way into a spectacularly anti-customer business decision. I imagine that’s the type of meeting that occurred with LeBron and team when they hatched the national TV special idea.

A retailer colleague of mine recently told me a story of such a session at his company. The head of the call center was complaining about volume spikes that kept hitting the call center. Her call center operations were deemed a cost center, so the metrics she used to measure her operation were all cost related. These spikes in volume were jacking up her costs, and she was making a lot of noise about it. My colleague noted the spikes in volume were following promotional email blasts that were widely considered very popular because they drove a lot of sales. No one would even consider stopping those emails, so the group began to latch on to the idea that they simply close the call center on days when the promotional email went out. Seriously. Luckily, my colleague was able to pull the group back from the brink and save them from going LeBron. But it was close.

We have to be careful that we don’t get so caught up in our own perspectives that we lose sight of our customers’ perspectives. Because we have direct control over the experience we provide, it’s sometimes easy to let that control be dominated by our own needs without considering the needs of our customers. When that happens, we’re seriously in danger of going LeBron.

Consider a few potential scenarios:

Does your company’s loyalty program makes its rewards intentionally difficult to redeem in order to reduce costs? If so, you might be going LeBron.

If your return policies make your job easier while making your customers’ returns a lot more difficult, you might be going LeBron.

If you promote a sale of up to 70% discounts and bury only an item or two at 70% off within a sea of items that are less than 20% off, you might be going LeBron.

If you choose to leave in place an onerous process for customers to check the status of their orders because it saves you time and money, you might be going LeBron.

Whenever our needs get way out of line with our customers’ needs, we’ve got a business problem that could be deadly. We provide products, services and conveniences that our customers value enough to give us their hard earned cash in exchange. But the relationships we have with most of our customers are somewhat fragile. When we make business decisions that are primarily motivated by our own self interests (especially those motivated by some subsection of our businesses and driven by short sighted personal motivation), we risk potentially fatal damage to many of those relationships. We don’t want be caught startled that our customers are burning our jerseys. We don’t want to go LeBron.

Instead, we can best succeed by regularly considering our customers’ needs and desires when making business decisions. Such consideration will help us maximize the customer engagement cycle and lead us to solid and profitable growth.

What do you think? What examples have you seen of companies going LeBron?


The Monkey Cage Sessions

monkey throwingI’ve seen a lot of strategies and “solutions” fail over the years primarily because the solution was crafted before the problem addressed was thoroughly understood.

Many times, the strategy or solution was the result of a brainstorming session filled with type A personalities (me included) ready to make things happen.

You may be familiar with the type of session I’m referencing. Usually, there’s a guru consultant leading the charge. He separates the group into teams and gives them Post-It notes and colored sticker dots. “Write down as many ideas as you can in the next 20 minutes. Don’t think too much. Be creative! No idea is dumb. Stick your ideas on the wall. Now go!” After 20 minutes, a leader from each group presents their best ideas to the rest of the room. Then each person in the room is allowed to vote for maybe six of his or her favorite ideas using the colored sticker dots. A few people are assigned the winning ideas and off we go.

Those types of session frustrate me. I’m concerned there’s too much action, too many unspoken assumptions, and not nearly enough serious thinking.

Over the years, I’ve developed a problem solving technique that I’ve found to work a lot better. I call it the Monkey Cage Sessions. The technique is all about thoroughly identifying the problems from all angles before developing carefully considered, thoughtful and collaborative solutions.

It’s got an intentionally silly name because the process should be fun.

Here’s how it works:

Step 1 Define the problems.

We start by gathering a group of cross-functional people – ideally from different levels of the organization – together in a room to talk about the problem or problems we’re trying to solve. This could be as simple as enhancing a Careers page on the corporate website or as complicated as building a complete company strategic plan. It’s important to define the general scope of the problem, but it should be defined fairly loosely so as not to stifle the discussion.

The rules of the meeting are fairly simple. We only discuss problems. No solutions. This is a license to bitch. Let it be cathartic.

I usually stand at the whiteboard, marker in hand, and write down everything everyone says. There is no need to be overly structured here, and anything anyone says is legitimate. We throw it all at the wall and we’ll sort it out later.

Sometimes people want to debate whether or not something another person says is really a problem. If someone said it, it’s at least a perceived problem. It’s legitimate. Also, there is often an attempt to offer an explanation for why a problem exists. The explanation is covering for another problem, so that problem should be written down.

People are always tempted to offer solutions, even when they think they’re offering problems. For example, someone might say it’s a problem that we don’t have a content management system. Actually, a content management system might be the solution to a problem. What problem might a content management system solve? Beware of any problem statement that starts with “We need…” and be prepared to break down that need into the problems needing the solution.

Sometimes the problems offered up are very broad and vague. In those cases, it’s important to work with the group to dissect that broad problem into its component parts.

This first session generally uncovers a LOT of problems, but the problem is still usually not completely identified yet. Which leads to…

Step 2 Categorize the problems

While the chaotic approach of the first session works well to get an initial set of problem descriptions, it’s important to create some order in order to prepare for the problem solving stage. So Step 2 involves writing down all of the problems and sorting them into logical categories. I don’t have any pre-determined set of categories. Instead, I prefer to the let the problems listed dictate the categorization.

Step 3 – Widen the circle

We probably have a pretty good description of the problems now, but we’ve also still likely missed some. For Step 3 we send the typed and categorized list of problems to the original group as well as a widened circle of people. The original group will likely have thought of a couple more issues since the day of the meeting, and the new group of people will almost definitely add new problems to the list. Since this is the final stage of problem description, we want to give this step at least a few days to allow the team to think this through as completely as possible.

Step 4 – Develop the solutions

Finally, we can start solving the problems. Woo hoo!

Now it’s time to gather a subset of the original meeting to start working towards solutions. There should be at least a few days between Step 3 and Step 4. We want to give people some time to think over the full problem set. The group should enter the Step 4 meeting with at least some basic solution ideas. There is no need to come into the room with comprehensive solutions that solve every problem on the list, but the solutions considered should certainly attempt to solve as many problems as possible (without causing too many new problems).

I usually find that by this point many of the solutions are fairly obvious. But there should be good discussion about the relative merits of each suggested solution, and the solutions should be measured up against the problem list to determine how comprehensive they are.

I like to end the meeting by assigning people to lead each of the proposed solutions. Obviously, any suggested solution from this session will need to be fleshed out in a lot more detail, and the leader from this meeting is responsible for determining the viability and solution and then potentially leading the development and ultimate execution to completion.

Subsequent progress is then handled via a separate execution process.

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I’ve had very good luck over the years using this technique. Some of the primary benefits I’ve found are:

  1. Better understanding of the problems
    As the initial meeting wraps up, most people are inevitably feeling enlightened about the problem. They’ve outwardly expressed their own assumptions (which sometimes even they didn’t know they were making) and they’ve understood the perspectives and assumptions of others. They’ve seen the problem in an entirely new light.
  2. More comprehensive solutions
    The heightened understanding of the problem and the critically important time between steps to allow the team to be more thoughtful in their ideas. Those ideas are usually pretty all-encompassing solutions to start with, but the discussions in Step 4 lead the team to collectively choose the best of the best of the solutions offered.
  3. Better execution
    Solutions are nothing but fancy ideas until they’re executed. And poor execution can cause even the best ideas to fail. The process of fully defining the problems and sharing that work with wide circles of people is an incredibly important stage that sets the foundation for success in execution. When the execution team provides input in the process and understands the basis for the solution, they are far more supportive in the effort. They are also far more prepared to make the daily, detailed decisions that are often the difference between success and failure.

So, that’s the Monkey Cage Sessions. I hope you find it helpful. If you try implementing the process in your business, I’d love to hear how it goes.

What do you think? Would this process work in your organization? Have you ever used a similar process?


Click (not the one you think) to success

Click book coverIn my experience, the most important factor for success in business is the ability to interact well with other people. Leadership skills, financial skills and technical skills all matter a lot, but they don’t amount to a hill of beans without solid people skills.

The reality is none of us can be successful completely on our own. We need the help of other people — be they peers, staff, managers, vendors or business partners — to successfully accomplish our tasks and goals.

Human relationships are more complicated than Wall Street financial schemes, but we often take interpersonal skills for granted. We rarely study them to the degree we study financial or technical skills. After all, we’ve been talking to people all our lives. We’re experienced. But I’ll argue there are subtleties that make all the difference, and they’re worth studying.

In my opinion, the best business book ever written is How to Win Friends and Influence People by Dale Carnegie — and it’s actually not even classified as a business book. I’ve never read a better guide to the basics of interacting effectively with people.

But I just finished a book that will take its place nicely alongside the Carnegie classic on my bookshelf.

Click: The Magic of Instant Connections by Ori and Rom Brafman (authors of Sway, one of my favorite books from last year) explores the factors or “accelerators” that exist when people “click” with each other. We’ve all had those instant connections with people in our lives, and those types of connections generally lead to powerful and productive relationships. While the Brafmans dig into both the personal and business nature of those connections, for purposes of this post I’ll focus on the business benefits of understanding and fostering such connections.

The book covers a wide range of connection accelerators, more than I could ever cover in this space, so I’ll just address a few that really stood out to me:

Proximity
Simple physical proximity can make a huge difference in our ability to connect with others. A study of a large number of military cadets found that 9 of 10 cadets formed close relationships with the cadets seated directly next to them in alphabetical seat assignments. Another study found that 40% of students living in randomly assigned dorms named their next-door neighbor as the person they most clicked with, but that percentage dropped in half when considering the student just two doors away. Maybe more startling, the students who lived in the middle of a hall were considerably more likely to be popular than those living at the end of a hall.

Why?

The authors explain that these connections are often driven by “spontaneous conversation…Over time, these seemingly casual interactions with people can have long-term consequences.”

I think many of us have instinctively understood the value of placing working teams in close proximity to each other. I’ve personally always attributed that value to the working conversations that are overheard and allow various member of the team to better understand and communicate issues about the work. But maybe that close proximity is also allowing people to better connect with each other. Maybe those connections allow us to better relate to each other and give each other the benefit of the doubt. Looking back at my career, I can think of many instances where office moves have coincided with strengthening or straining my working relationships with people.

Proximity is more important than I ever thought. We should carefully consider office layouts to foster the right types of connections. If close proximity is not possible for certain teams or people, we should understand the negative effects of separation and look for other ways to foster the connection.

Resonance
Resonance “results from an overwhelming sense of connection to our environment that deepens the quality of our interactions.” Huh? For example, the book reports that we’re 30 times more likely to laugh at a joke in the presence of others than if we hear it alone. My friend and colleague Jeff Dwoskin moonlights as a stand-up comedian, and he once explained to me that the difference between a good comedy club and a bad comedy club is the arrangement of audience seating. When tables are close together, people laugh more. When there are lots of booths that separate the audience into tiny groups, it’s much harder to get a laugh and keep the funny going.

Many companies swear by their open seating arrangements. Rich Sheridan, founder of Ann Arbor-based Menlo Innovations, seats his agile development teams on open tables together. No cubes. No walls. He says it’s a huge key to their success. Does that work for everyone working team in all situations? I doubt it. But certainly working environments have impact on working relationships and their resulting productivity, and resonance is a concept worth considering.

Similarity
“No matter what form it takes, similarity leads to greater likability…Once we accept people into our in-group, we start seeing them in a different light: we’re kinder to them, more generous.”

Kinder. More generous. Those sound like good bases for effective working relationships. It’s amazing how finding common ground can bring teams closer and help them work more effectively together. Sure, those of us working for the same company in the same industry all have industry and company in common, but it seems like the more personal similarities are more likely to bring people together. For that reason, we should encourage water cooler chats and other personal interactions in the work place. Everything in moderation, for sure, but a little personal time can actually end up improving productivity by reducing stress and misinterpretations that lead to unproductive miscommunications. The book reports that a “Finnish health survey conducted on thousands of employees between 2000 and 2003 revealed that those employees who had experienced a genuine sense of community at work were healthier psychologically.”

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“Common bonds and that sense of community don’t just foster instant connections — they help to make happier individuals.” The Brofmans provide numerous examples of teams that performed significantly better than others primarily due to the interpersonal dynamics of their members. We simply cannot succeed in life without the support of other people. It’s worth taking the time to understand how to improve those relationships for the betterment of all parties. And pick up Click, it’s well worth the read.

What do you think? Is this all hogwash? Do you have stories of how personal relationships have led to success in your life?

Retail: Shaken Not Stirred by Kevin Ertell


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