How to Win by Putting Customers at the Core of Your Business
By Frances Frei and Anne Morriss
Published by Harvard Business School Press
ebook ISBN: 9781422142363
Copyright © 2012 by Frances Frei and Anne Morriss
Charismatic leaders sometimes assume that they can avoid this trade-off by sheer force of personality. If they just get everybody fired up, the kinks will work themselves out. But you can’t design a system that is based on the faith that all of your employees will perform heroically, all day, every day, for an indefinite period. For a system to work, excellence must be normalized. And you don’t get to that point by demanding extraordinary sacrifice. You get there by designing a model where the full spectrum of your employees—not just the outstanding ones—will have no choice but to deliver excellence as an everyday routine. You get there by building a system that just doesn’t produce anything else.
Heroism, in fact, can be a red flag. We know a service recovery expert who comes in early and stays late every day, picking up the slack and overcoming the obstacles in her company’s service design. Whenever a client has had enough and is about to walk, she gets on the case and, through her superhuman effort, “fixes” everything. But as long as she’s around, the company will never confront the serious problems they’ve created for themselves, the money they’re leaving on the table, and the growth opportunities they’re missing—to say nothing of the risk of assuming that this very special employee will stick around. Cynicism can build quickly among talented, client-facing people when service problems are systematically tolerated. The cape starts to feel heavy when it’s overused.
Great service, it turns out, is not made possible by running the business harder and faster on the backs of a few extraordinary people. It’s made possible—profitable, sustainable, scalable—by designing a system that sets up everyone to excel.
THE FOUR SERVICE TRUTHS
Once you accept the idea of trade-offs—and break the addiction to service heroes—the inputs into service excellence are much easier to consume. We lay out these inputs in a framework we call the “four service truths,” which are the assumptions behind the basic elements of a successful, high-service model: a service offering, a service funding mechanism, an employee management system, and a customer management system (figure 1-1, not shown). These four truths act as the mental cornerstones of a sustainable model for delivering uncommon service:
1.”You can’t be good at everything.” You must be bad in the service of good. Excellence requires underperforming on the dimensions your customers value least so that you can overperform on the dimensions your customers value most. Once you choose this path, the decision on where to be good and bad should by driven by deep insight into who your customers are and what they need operationally.
2.”Someone has to pay for it.” Service excellence must be funded in some way. You can find a palatable way to charge your customers more for it, reduce costs while improving your service experience, or get customers to do some of the work for you. Choosing among these strategies—finding the right funding mechanism for your business—will depend on both industry dynamics (e.g., price sensitivity) and the specific relationship you have with your customers.
3.”It’s not your employees’ fault.” Your people matter, but not because they’re the make-or-break input on delivering uncommon service. What matters more is the way you’ve designed your service model, in particular, the way the model sets up average people to excel as a matter of routine. Rather than creating an environment where employees have the time and space to focus on satisfying customers, many service organizations today are actually undermining their people’s ability to serve.
4.”You must manage your customers.” You must be deliberate about involving your customers in creating—not just consuming—your service experience. In other words, you also need a management plan for your customers. To return to our manufacturing metaphor, the special challenge of service delivery is that your customers routinely wander onto the shop floor—unannounced—and tinker with the assembly line. And yet success isn’t just a matter of keeping them out of trouble. Your customers need to play a productive role on the line itself, and to do so, they need training, guidance, safety goggles—and more.
Finally, you need to unleash that service model in an organizational culture that reinforces it at every turn. Getting the service design right is only half the challenge. The other half is creating a culture that’s sufficiently aligned with that model. In services, in particular, culture defines an enormous part of the stakeholder experience—every employee decision, every customer touch point. With clients wandering the shop floor, there’s no keeping the ugly truth contained in the back office.
In our work, we often ask people to wrestle with this definition of leadership. Leadership, at its core, is about making other people better as a result of your presence—and “making sure that the impact lasts in your absence.” As a leader, you create the conditions for others (in services, that means employees “and” customers to perform), and you do what it takes to sustain those conditions, even when you’re not in the room. Designing good systems is part of this “absentee leadership,” but the most powerful tool you have, by far, is culture. Culture not only guides individual decision-making, but also provides the foundation for all other organizational behavior and action. In other words, culture doesn’t just tell you what to do—it shows you how to think.
We see it this way:
SERVICE EXCELLENCE = DESIGN x CULTURE
Each factor in our service-excellence equation is weighted equally, which allows for some wiggle room. A stronger culture can partly make up for a weaker design, and vice versa. But if either one is neglected, you’re stuck. Excellence is definitively beyond your reach.
If your ambition is to grow, our advice is to first get your own equation in order. Get a high level of control over your service design and culture, understand the levers that drive each one, and then use them more strategically. We do our best in the following pages to guide you on that journey. Once you’re in control, you basically have two choices when it comes to getting bigger: do more of what you’re already doing, or do different things. In our worldview, doing more of what you’re already doing means growing the existing service model. Doing different things means building new service models. Both paths are viable, but there are specific challenges to each.
part three of ‘Uncommon Service’ appears here tomorrow; in the meantime, if you’re enjoying this selection from the Oakville Public Library Business Online Book Club, go to your local library or better still, Buy the Book