Archive | January, 2013

Rising on a word, falling on a syllable : corporate reputation and trust in the 2013 Edelman Trust Barometer

22 Jan

Crisis of leadershipSlide1 (4)

The 2013 Edelman Trust Barometer is out this week – the shorthand summary would be corporate leadership is in crisis – and, as usual, it paints a fascinating global picture of shifting, evolving and fragmenting attitudes to big business and governments and how the nature of ‘trust’ is changing.

Edelman rightly zoom in on the world of financial services, and banks in particular, where, not surprisingly, trust levels have fallen still further (halved in fact, in the UK, and even worse in Ireland), making life harder and harder for companies. Reputation is indeed a fragile construct, as Robert Pattinson’s character says.

Here, then are some reflections on the survey findings, a slideshare presentation of which can be found here.  

Culture eats everything for breakfast

Not just strategy, it seems. It’s fascinating to read that when the informed public were asked what they felt were the biggest causes of recent high profile banking scandals, almost 60% felt it was down to internal factors within the company’s control, rather than external. This is about how things got done in these companies. Notably:

  • Corporate cultures driven by compensation / bonuses (23%)
  • Corporate corruption (25%)
  • Conflicts of interests (11%)

The last one is key, and maybe even drives the others. What we’re talking about here is the realpolitick world of trade-offs where what Peter Scott-Morgan calls the unwritten rules come into play, with a vengeance. For example, serve your boss or your boss’s boss as he/she controls your reward, or forget the customer’s longer term needs, just sell now. Look, for example, to the hot-off-the-press story about the culture at Barclays Wealth, a US arm of the bank, described as one of “revenue at all costs”. Click here for the story. No wonder it’s a crisis of leadership, because yes, cultures are set by leaders and it’s all within their control.

Or, rather, not in their control : there was a fascinating study last year from Deloitte’s “Culture in the Workplace” that reported that while 94% of executives say workplace culture is important (who wouldn’t!), only 19% say their own culture is widely upheld! No wonder the unwritten rules take over.

Managing the conflicts, managing the timeframes

Managing for ‘shareholder value’ creates real conflicts. Even Jack Welch said in 2009, “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products”.

Roger Martin, ex- dean of the Rotman School of Management in Toronto writes about shifting focus back to delighting the customer, and says, “If you take care of customers, shareholders will be drawn along for a very nice ride. The opposite is simply not true: if you try to take care of shareholders, customers don’t benefit”.

To me, it’s also about time frames. A jam-today ‘revenue at all costs’ mindset will inevitably conflict with the customer’s longer-term interests. I’m reminded of a good piece in the Guardian in November last year, “Leaders must stay close to principles of service” by Tim Macartney where he talk about the Iroquois Confederacy of First Nation’s people in the north-east US who, when they take a decision, submit the issue to the principle of seven generations: “Will this decision when translated into action have any kind of harmful outcome on our children seven generations to come?” Tim goes on to say, by way of contrast, “we have constructed a system that doesn’t even consider such questions, instead asking something rather more limited in scope and moral probity: “How will this benefit our shareholders?” And since the leaders of large organisations are often also shareholders, “How will this benefit … me?” And that takes us right back to the unwritten rules (what do I really need to do to keep my boss happy and get paid?) which, in the absence of anything else, become our rules of thumb for navigating the conflicts.  

The (Bob) Diamond of Influence

While not new news, it’s fascinating that credibility as a trusted information source has been shifting away from formal and hierarchical sources – CEOs, PR spokespeople – to experts (assumed to be independent and thus trustworthy) and the more informal sources, ‘people like me’, including the rank and file employees in organisations. The theory being, they really know what it’s like, and are more likely to it tell it like it is. Edelman tells us that “a person like yourself” is now trusted nearly twice as much as a CEO. As Edelman suggests, influence has become  democratized.

So, out with the old and traditional pyramid of influence – a top-down, authority-driven model – and in with the new, the pyramid of community where social activists, passionate consumer advocates and employees are powerful – because authentic – voices.   

BLOG Pyramid slid

Edelman talk about the diamond of influence, see above, the new model for stakeholder interaction and management. I’m not sure it’s a diamond, a pretzel might be more appropriate, as consumers might well be going round the information and engagement loops quite a few times, and consumers and customers now have many more opportunities to amass different viewpoints, and concurrently too. I agree that “this is not a linear process but rather it is dynamic, continual and evolutionary in nature”.  

It’s certainly continual – the research states that nearly 2/3rds of us say we need to hear a message 3-5 times before we believe it. And it’s a message that’s constantly being tested in the public spotlight. One slip and that’s it, back to the long hard slog of rebuilding, and we all have memories like elephants, these days. In fact, more to the point, we don’t need to have memories like elephants, we just need to know how to google.

Can trust be ‘rebuilt’?

There’s a great quote in a Wolff Olins report from last year, ‘Game Changers’ that says, “It’s easier for a trusted brand to become a bank than it is for a bank to become trusted”.

In the just published World Economic Forum Global Agenda Outlook, Michael J. Elliott, President and CEO of ONE USA challenges the notion of rebuilding an ‘old model’ and reinforces the power of informal networks to build trust:

“There has been a breakdown in trust in established institutions. But if we think that the solution is to rebuild trust in those same institutions, we may be missing the signal. Social media is creating new institutions. They may not be corporations, they may not have an HQ, but it is possible that we are finding new informal institutions that enable people to do things together. People today are less influenced by me, or you, or for that matter, by famous people, than by their friends”.

Trust as a leading indicator

An Edelman blog linked to the 2013 results says that trust is a leading indicator unlike reputation, which is the sum of perceptions of past behaviours. I like that. So, what then drives Trust? Here the report gets really interesting in giving us 16 attributes of trust, grouped into five clusters, with “engagement” the most important. See slide.

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 Engagement breaks down into treating customers and employees well, putting their needs first and open and honest communications .Hardly rocket science, in fact much more like good old common sense, but it’s going to take a lot more than simply writing and saying this repeatedly.

 For me, it all comes back to the survey data about the perceived causes of the crises, and the C-word, Culture. It means resolving the conflicts of interest and being very clear about what ultimately drives long term and sustainable business success. In the words of Richard Branson:

“For us, our employees matter most. It just seems common sense to me that, if you start off with a happy, well-motivated workforce, you’re much more likely to have happy customers. And in due course, the resulting profits will make your shareholders happy”.

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10 crazy things companies say and do that sabotage great customer experiences

17 Jan

Now, sabotage may be a strong word – after all, no one sets out to screw things up for customers – but the interesting thing about these 10 classic behaviours is that they are all pretty much insidious, they take their time, and they all serve to eat away at corporate best intentions. As the classic phrase has it, ‘culture eats strategy for breakfast’, so check out my top 10 crazies:   

  1. Yes but….: the curse of ‘smart talk’. Why is it that the more senior you get, the more you feel compelled to critique, query, call for more evidence, ask for more opinions and generally put off saying yes or no? Everything seems to be stacked against just saying, ‘OK, yes, let’s try it”.   
  2. Show me the money now: does anyone seriously believe that all that financial modelling and forecasting years into the future is how it will all play out?  Yes, the connections between customer experience and financial outcomes are there to be proven, but it takes time and it’s not an exact science. So, start with leadership, faith and belief, all just as important as the Excel comfort blanket.
  3. ‘Customer Value Maximisation’: if all that the customer represents to the business is a number or a red/amber/green rating on a dashboard, then pretty soon there’ll be a project called something like this customer value maximisation, which is shorthand for ……how can we get more money out of our customers? Please don’t forget that customers are people too, just like you and me.
  4. You’re not from round here are you? : “I hate to tell you this, but we’re not Apple, John Lewis, Starbucks, Zappos or any of those other customer experience poster children I hear a lot about”. In other words, let’s find ways to patronise you and your idea because you don’t really ‘get’ our business.     
  5. We hear what you say, but …: your feedback (which is valuable to us) will be aggregated with all the other feedback, then prioritised and assessed, and then we might be able to fix the problem. Which is fine, in a way. But of course, let’s not forget that real customers have problems one by one, and they need to be sorted there and then, not just collated for the future. 
  6. Pet Project-itis: Ok, this big old project may not be working out as planned, but we’ve invested far too much in it to pull the plug now. And the further the train is from the station, and the faster it’s going, the harder to reach for the emergency stop button.
  7. You’ve come through to the wrong department: if people go quiet and assume a puzzled faraway look when asked how their job contributes to getting and keeping customers and improving the customer experience, then you may be working in a dysfunctional company. The reality is, it only works when it all works, when the whole organisation works together, to design and then orchestrate the delivery of the experience.
  8. Multi-cultures, multi-companies: ‘culture’ is a difficult thing to pin down. While businesses like to talk about corporate culture and values, the idea of one common shared culture may be over-simplistic, when in reality, bosses and department heads set ‘culture’ day by day, whether consciously or not, through their behaviour. And the more silo’d the business to begin with, the less interaction between departments, the more you’ll find a multitude of cultures. And, one team’s tight-knit, supportive, and progressive culture is another one’s source of amusement, disbelief, scorn and even ridicule. So, work hard to understand the grey shading between teams, departments, countries even, whilst also being clear on what is non-negotiable at the very heart of the corporate culture.       
  9. Messengers don’t like being shot at: when calling out a problem doesn’t make for a pleasant  day at the office – when it risks wrath, humiliation, displeasure or worse  – it becomes so much easier to move that borderline red flag to green, and carry on as normal. As in SNAFU.
  10. A company is known by the people it keeps. Or doesn’t: the reality is, the cast is constantly changing, maybe as much as the customer base, maybe more so. Every business, ultimately, is a people business. If consistency of service and treatment is important, or rather its opposite is very frustrating and unsettling, why not recognise the role that good reliable people play in delivering the ‘promise’. After all, the alternative, treating people as a cost and yet expecting them to go the extra mile for customers is just well… crazy. 

What do we want? When do we want it? Five real-world customer pleas from the heart

9 Jan

While companies love to talk about customer ‘relationship’ and engagement and so on, I often think this is presuming too much too soon. To get to these lofty aspirations takes time, there are no short cuts. Hence my five pleas to remind us all what customers really want.begging for chance - business woman

  1. GET THE BASICS RIGHT

Firstly, just get the basics right, please. Make it easy and painless to deal with you, and do it consistently too. SO, just do what you say you’re going to do. I really don’t want you to get this wrong. That’s not too much to ask for is it?  Get all of that right, and OK, I might do more with you, but there’s no short-cut. Get the basics right first.  

  1. EARN THE RIGHT FOR MORE OF MY BUSINESS

You seem to forget about me. In fact the only time you remember me is when you want to sell me more. That won’t make me like you any more, or help build that ‘relationship’ (odd word, by the way!) you talk about. So, if you can help me get a better deal for no extra cost, then I expect you to tell me. If you don’t, I’ll be angry. And, I do like little freebies where you give me something for nothing. I think that’s a nice gesture, and I won’t forget it.

In fact, I will happily tell my friends about something great you’ve done for me, as it makes me look good too, because it shows I chose well in choosing you! 

  1. TREAT ME LIKE AN ADULT

I’m not an idiot – I know that advertising is propaganda. So, please don’t promise me the earth, because, well, chances are you‘ll under deliver and then disappoint me. How about if you treat me like a grown up? Honesty trumps perfection, because the latter is impossible. 

And, I realise mistakes can happen every now and then; after all we’re all human. But, it’s how you deal with it that’s important to me. So, again, I want you to be honest with me, own up to the mistake, and, because you have made a mistake, go the extra mile to get me back on your side and not ruing the day I chose you.  

Finally, don’t pressure me. If I do choose to buy something from you and give you more of my business,  I want to do it when I decide and when it’s convenient for me, not when you contact me with one of your unmissable offers I’d be an idiot to ignore.

  1. STOP MAKING IT ALL SO DIFFICULT

You’re impossible to talk to. You have no idea how much effort it takes to contact you, and the hoops you make me jump through, before I finally get to talk to someone about what I want to talk about. My time is incredibly valuable to me, and yet it feels like you couldn’t care less.

And why is it that when I finally get through to someone, they often can’t help me? Why all these rules, policies, processes, systems and protocols? Why is it that the first person I speak to can’t help me? Why does such a simple request become a Kafka-esque nightmare?

Plus, you don’t seem to listen to me. When you do ask for feedback, and I take my time to give it to you, you don’t ever seem to do anything with it. Or, if you do, you certainly don’t tell me. What exactly do you do with my feedback?

  1. BE ON MY SIDE

I’m not naive. I know you have to make money, and that’s fine, but it’s how you do this that interests me. If you make a lot of money by penalising me – if I make a mistake, or forget, or don’t understand something or lose something – then that feels more like exploitation than a ‘relationship’.  I don’t want you to con me – it would be great if I could feel that you were trustworthy and on my side and gave me the benefit of the doubt from time to time. After all, I am a customer of yours, I’ve chosen to give you my money, so it’s not too much to ask for is it? 

Nine customer experience resolutions for 2013

1 Jan

According to Forrester, nearly 75% of customer experience leaders say their firms’ goal is to differentiate on the basis of customer experience. No surprises there then. Despite that heart-warming aspiration, we’re also told that only 3% of companies succeed in delivering a great experience. Talk is (very) cheap. Here then are my own pleas and provocations, including some lessons learned the hard way, for what needs to be on your New Year’s resolutions list. Start, stop, and cancel buttons on an office laser printer

USE WORDS THE CEO UNDERSTANDS

If your CEO has the emotional intelligence of a kidney bean, then good luck talking about loving and respecting the customer and pointing out that it’s the customer who ultimately pays everyone’s salaries.

Unless you are blessed with a CEO who naturally thinks customer, you will struggle to make ‘customer stuff’ more than a project or an initiative, in other words, something with an end date, until you make the connections, causation and correlation between customer (and employee) happiness and the financial bottom line.

Do that and you’ll be talking a language they’ll hear: to misquote US President Lyndon Johnson, ‘get them by the numbers and their hearts and minds will follow’.

RECOGNISE THAT THE CUSTOMER IS BIGGER THAN THE COMPANY

Someone – whether the CMO or the Chief Customer Officer – needs to fight hard for the customer and train the business to understand that great customer experiences ‘only work when it all works’ as far as the customer is concerned.

Stop the squabbling at the executive table and poring over internal efficiency metrics and look at customer outcomes, and start working together for the customer. The 2012 Temkin Group survey tells us that the top two obstacles to customer experience efforts are ‘other competing priorities’ (72% of companies) and ‘conflict across the internal organisations’ (52%).

So (and forgive the jargon) this means breaking down the silos, and using disciplines like customer journey mapping to design with intent the experience, and help business get its’ CEO: Customer Eyes On.

MAKE CUSTOMER CENTRICITY FOR LIFE NOT JUST XMAS 

Customer centricity is a tough sell internally because it should challenge short term thinking. It’s about forgoing short term profit maximisation, the kinds of things that help the balance sheet but piss off customers (what Fred Reicheld calls Bad Profits), in return for the more uncertain expectation of longer term gains, the Good Profits that come from happy customers giving you more business, sticking with you and saying nice things. So, it takes guts and courage at the top to embark on this journey and then stay the course.

  • MAKE THE CUSTOMER REAL FOR EVERYONE

As the old saying goes, if you’re not serving customers, then you’d better be serving someone who is. However, the reality is, it is far too easy for most employees to find reasons to distance themselves – literally and emotionally – from the customer. Companies need to find imaginative ways to connect the back office and head office with customer’s lives. And to do this in a way that isn’t superficial and box ticking. Half-listening in on calls once a year on a back to the floor programme, whilst catching up on emails on your blackberry won’t cut the mustard.

And, how much time does the CEO spend with customers? According to PWC*, among global CEOs, 69% wish they could spend more time meeting with customers. I hope this doesn’t just mean inviting business customers to sporting junkets. And, how many of your employees use your own products and services? How well do you harness their own experiences, good and bad, and use these to improve the experience for all customers?

Imagine if the customer was in the conference room with you, observing the decisions being taken. Would you so be so quick to agree to that new pricing plan, knowing in your heart that the real winner isn’t the customer, but the company and the distributor too?  Jeff Bezos is famous for keeping an empty meeting-room chair for the customer at amazon. For many companies, they’d firstly have to remove the shareholder from the chair

  • PUT LITTLE DATA BEFORE BIG DATA

I worry about all this talk of a brave new world where companies have unprecedented amounts of customer data, knowledge and analytics at their fingertips. To do what exactly? I doubt that many of us consumer want to be relentlessly sold to, having been brilliantly targeted and hunted down like prey. Where is the heart behind the machine? Organisations still have to firstly earn the right to ask for more of my money, which means getting the basics right and being there for me when I need them and moreover, doing this consistently. Sounds simple, but it’s not.

So, with power comes responsibility; with big data comes bigger responsibility.  Let’s please not forget the basics of serving customers, one at a time. There’s a great quote from Howard Schultz who, complaining in 2008 that Starbucks had lost its’ focus on the customer, wrote:  “We thought in terms of millions of customers and thousands of stores instead of one customer, one partner and one coffee at a time. We forgot that “ones” add up.”

  • LISTEN TO THE VOICE OF SOCIETY; IT’S GETTING LOUDER

It used to be enough for a company to act a good corporate citizen through its green initiatives, workforce volunteering and sponsorships.  Thus the CSR box got ticked. Wolff Olins wrote in their Game Changer paper about a ‘lukewarm bath’ of ad hoc policies to neutralise the embarrassing stuff: “banks stayed greedy but continued to pour money into the arts”. 

Reputation becomes all important as societal scrutiny grows: how close to the wind does the company sail in its tax affairs?; how well does it look after its workers, are suppliers exploited? Issues that in the past had, on the face of it, not that much to do with the actual product nor even with the customer voice. Apparently, when he took office, the IBM chairman asked, ‘why would society allow us to operate’? That’s a really good question and one that’s going to have to be taken more seriously in the future.

Managing the tensions between different groups’ needs – shareholders, customers, employees, suppliers, partners, and wider society – will become tougher and more visible.  Peter Drucker wrote in 1973: “to know what a business is, we have to start with its purpose. Its purpose must be outside of the business itself. In fact, it must lie in society since business enterprise is an organ of society”.

  • LEARN TO LIVE WITH SOCIAL MEDIA

I’m no expert in social, but it’s here to stay, so let’s stop acting like rabbits dazzled in the headlights. It feels wrong to:

  • Run fun and sexy “like me, please” campaigns that have very little to do with what your business is about: I doubt that a ‘social’ veneer will turn it into something it isn’t. Think of Dad dancing at the disco
  • Sometimes respond, sometimes not. Are you really ‘closed’ at the weekend, for example? A recent survey by Customer Service Investigator found that big name brands responded to only 14% of requests for help, via social media!
  • Use social media for self-serving propaganda; consumers aren’t naive, and will see through it. Think of the Waitrose campaign from a few months ago, or more recently how Starbucks’ “spread the cheer” campaign backfired.
  • Treat it like a separate channel, or an add-on, to be picked up and put down

Social is turbo-charged conversations. Why wouldn’t you want to talk to, listen and learn from customers? And, because great customer experiences start with your own people…

  • MAKE YOUR OWN WORKFORCE A FORCE FOR GOOD

As I suggested earlier, every employee ought to be an advocate for their own company’s products. If they’re not, then some serious questions need to be asked. Like what are you doing here, for one, and why does the company feel that a dis-engaged workforce will lead to happy customers?

There’s a wealth of data out there to show that when people are proud of their company good things happen: they stand up for it, they own their friends’ problems and so on, all in order to change the external perception.

I was reminded of this when I read a spokesperson for Barclays say, in a recent Marketing Week article “I see what the organisation believes internally and it is not the organisation that is portrayed, the organisation people see from the exterior”.

The power and role of workforce advocates will grow. After all, the 2012 Edelmans Trust Barometer tells us that while the CEO is declining as a credible information source (understandable, given the bad rep automatically bestowed on most high profile CEOs these days), the rank and file employee is growing in credibility as an information source and company representative, probably because it’s much easier to relate to them than it is your average CEO.

  • REWARD THE RIGHT BEHAVIOURS

You get the most behaviours from the behaviours you reward the most. A couple of recent US cases involving big companies are noteworthy. The New York Times ran a story about Staples in the US who, according to employees, “has in place a set of incentives that make it unpleasant, to put it mildly, for staffers to sell a computer without a whole bunch of accessories, particularly a service plan”. Hmm. On the plus side, GM Motors’ CEO launched a new compensation structure that connects staff bonuses to loyalty, measured by repeat purchases, in other words, people coming back and buying more cars.

 Incentivising for short-term sales is not compatible with generating long term loyalty. No amount of positive internal messages about looking after customers – the kind of stuff seen on office walls – will counteract those metrics that affect the pay-packet.

References:

  • Forrester, December 2012
  • PWC 10 Minutes on Customer Impact, March 2012.         
  • Wolff Olins, Game Changers, 2012
  • Peter Drucker, 1973
  • Marketing Week, Barclays promises a ‘relentless customer focus’ to rebuild trust, 6th December 2012
  • CSI Infographic, 11th December in mediabistro.com

Image courtesy of www.freeimageslive.com

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