I just read two news articles this morning of the type that make me gnash my teeth and shake my head. Both involved Fortune companies planned to cut staff by the thousands based on bad financial results. Say what? To these companies, I ask, “Why were you carrying so much excess staff you could do without?”
Most service companies carry double-digit percentage excess staff. Likewise for product companies in their back and front office settings. How do I know? Process redesign, streamlining in particular, plays a primary role in helping clients meet and exceed customer requirements. And we constantly find excess staffing over-distributing decision-making authority, leading to employee disempowerment and creating excess bureaucracy, both of which drive customers nuts. Today’s customers want to deal with well-trained, empowered employees and as few of them as possible – and on the web an increasing percentage wants to research and order commodity goods without any personal contact.
So how does head count typically change after streamlining? By a negative 15% to 20%, in our experience. But rather than streamlining, most organizations throw people at problems, and the more they add the less efficient and effective work becomes. So instead of streamlining to create a win-win for both company and customers, they create lose-lose by overstaffing.
The optimist in me says, “Probably not.” The realist in me suspects we are, for several reasons.
-Customers were initially grateful that many companies appeared to be searching for comity. However, buyers now appear to be moving through this phase, which I call “play nice.” Now they’re seeing through the many insincere seller efforts to look and sound more customer-centric and becoming more cynical and mistrustful of sellers than ever. Hence, an increasing percentage is no longer “playing nice.”
-Influenced not only by transacting business over the web but by not seeing the “what’s in it for them” from forming relationships with sellers, many buyers are trying to minimize contact with sellers, preferring efficiency over spending time interacting with sellers.
-The more latitude sellers give buyers to “have it their way,” the more idiosyncratic customer behavior becomes – to the point where finding common approaches to satisfying varied customer preferences is becoming very difficult. “Process-on-demand” (term coined by my colleague Bob Starinsky) is beginning to replace customer best practices.
How many times in your career have you heard, “Hey, we’re doing blah blah blah for customers. Can’t they cut us some slack? They can if they choose, but most customers choose not to show any consideration to sellers. After all, precious few sellers have shown any consideration for them.
So what’s all the babbling about buyer-seller “relationships?” How often do emotions overcome economics and convenience when buyers choose sellers? Rarely, I maintain. Steely-eyed customers evaluate every transaction, subconsciously at least, on all but the simplest exchanges of value. And no matter how many times a seller has done it right, supposedly building up a relationship, don’t screw it up this time seller or you’re toast.
Besides, customers don’t go out on dates. They’re too wary of seller motives.
So let’s pack up all the customer relationship fuzzies into a large trunk and sink it. The whole point for sellers today is doing everything right every time – and don’t depend on past performance to pull you through. Sellers need to keep their steely eyes on performance and be as intolerant of miscues as buyers are.
Last week I wrote about the difficulties Best Buy CEO Brian Dunn was having meeting customer expectations, which had been raised by previous CEO and visionary Brad Anderson, who retired. Today, Dunn is done. Victim of being a nuts and bolts operating manager for a company that needed another visionary. Best Buy badly needed someone at the helm committed to meeting and exceeding customer expectations – including shifting BB’s operating model to meet shifting customer preferences. An interim CEO from the Board will take command while the company searches for a new CEO.
What do you think chances are Best Buy knows what to look for this time?
Best Buy just announced a plan to take out 50 stores, 400 HQ jobs and many thousands of store employees. They blame the need to scale down on overbuilding. I blame it on shabby treatment of customers that’s driven buyers out the doors.
Just several years ago many of us were singing the praises of Best Buy and CEO Richard Anderson for taking a customer-eye view of their business – including extensive staff training and upgrading retail floor talent. But then Anderson retired, they hired Brian Dunn as new CEO, and Dunn’s first pronouncements addressed profitability and efficiency, not customers. The writing was on the wall. Back to the old, company-centric business model – which today’s customers aren’t buying, just as they’re not buying Best Buy’s merchandise.
Sure enough, lots of formerly loyal customers, myself included, now use Best buy as a store of last resort. So they’re not lying about being overbuilt. But they aren’t fessing up to the true reason. And so they’ll double down on what they’re doing wrong and morph into “Worst Buy.” It was good shopping with you – while customer-centric thinking lasted.
We all know from personal experience how this plays out on the customer front lines. You call Microsoft, Intuit, HP or whatever’s customer support and get someone speaking a barely intelligible version of your language (if you’re lucky). This person is obviously measured on call count, because he keeps pushing to end the call, problem resolved or not. I even had an HP call marked “successfully closed” or some such despite the “tech” unable to even identify my admittedly exotic monitor, never mind know how to rotate the screen 90 degrees back to normal.
But “behind the lines,” including at management levels, I see stress from excess workload, micromanagement enabled by micro-measurement and fear of losing a job keep internal concerns, including self-preservation, ascendant over customer concerns. Work is becoming more and more about pleasing the boss, which is often antithetical to pleasing customers. Our “pressure-cooker” corporate environments are not conducive to putting customers first.
Rephrasing the question, how far will customer-centric attitude and desire to help customers take an organization?
In my mind, not very far. Yes, process is my practice focal point, but I don’t believe I’m being biased. After every customer relationship audit, I come up with change recommendations that can be categorized as: “behavioral;” “process-based;” “process plus technology” based. The latter two categories almost always dominate the list.
Although far from a majority, the percentage of companies with customer-centric strategies continues rising. But then what? Well, in so many cases what comes next is a major disconnect. Once the customer-centric intent is established, next should come customer-centric process redesign (including designing enabling technology) that should change intent into action.
Unfortunately, what does happen instead is process design that covers its cost-control roots with a customer fig leaf. Companies wheel out production-based process schemas practiced by production-trained process designers and get production-based process – that adds only tangential benefits to customers.
Personally, I’d rather train process untrained people in the principles of customer-centric process and turn them loose, rather than bring in the Lean/Six Sigma troops. What do you think?
I suspect most readers will instinctively answer, “No.” Production quality refers to meeting a normative standard with as little deviation as possible. Service quality means meeting customer needs and expectations, which are all over the lot. So they’re not only not two sides of the same coin. But they’re different currencies. They just don’t equate.
But here’s a catch, at least for process professionals. You can’t answer “No” yet still maintain we should use the same process design approaches to achieve both a fixed standard and a highly variable “non-standard” – at least not rationally. But too often traditionally trained production process people, anxious to move into the customer process world, fall into “Maslow’s trap.”
“If the only tool you have is a hammer, than all the world tends to look like a nail”
Southwest Airlines broke the model while organizing and has stayed customer-focused ever since. Tellingly, however, when Southwest initiated service in several congested major airports (instead of secondary airports), its vaunted on-time arrival numbers took a whack. Is that because operating out of major airports “unbroken” the mold?
Several Asian airlines have achieved significant levels of customer-centricity seemingly within the traditional model. But perhaps East vs. West cultural differences gave them a route Western airlines can’t take.
What I’m driving at here is I can’t see any possibility American Airlines, Air France/KLM, British Airways, Delta, United et. al. can migrate very far towards customer-centricity. Before merging with united, Continental tried, but at the first sign of economic adversity folded back to the norm.