The Business Sensei

Passports Please

“May I see your passport?”

I’ve heard this request many times. However, as a US citizen, this was the first time I heard it while traveling within the United States. Sometimes customer service just is not what you expect!

The day before Halloween I was on my way to South Carolina with two friends. We were all heading to the same convention and coincidentally happened to be on the same United Airlines flights from Boston to Dulles to Columbia. We arrive in Dulles with just enough time to not quite make our next flight. Okay, that sort of thing happens. It’s a few hours until the next flight, so we got to spend the day at what is probably the Dulles airiport on Earth. At around 9:30pm, our 9:50 flight gets delayed to 10:15. At 10:15, it’s delayed to 11:15pm and then to 12:15am. I ask the gate agent what’s going on, and he says it’s a mechanical problem and the part just arrived from another airport. A half hour later, he tells me they are bringing in another plane. Then there’s an announcement that the flight is delayed due to mechanical issues, but they expect to have it resolved soon. At 12:15am, United cancels the flight and sends us all to customer service to for rebooking. It was clear that we weren’t getting to our destination that night; at least we did get to see the Sox win the World Series.

The three of us get to the head of the customer service line. There are four people there, all of whom are working with us. One of them takes our boarding passes and that’s when he asked for passports. We assume he meant ID, and hand over our driver’s licenses.

“No, I need your passports.”

Now, I realize that Washington DC is arguably in its own reality, but last I checked we still don’t need passports to travel in and out of a Washington airport.

“I don’t carry my passport,” I reply.

“I need your passport to rebook you,” says the, and I realize this may sound oxymoronic, Customer Service representative.

“We’re American citizens traveling within the United States,” says one of my friends. “We don’t have passports with us.”

This triggers a conversation amongst the four representatives. The three of us, meanwhile, were pretty tired; it was around 12:45am by this point. I credit our exhaustion for our failing to realize how honored we were: we were standing face to face with Larry, Moe, Curly, and Shemp. This was the unexpected bit of customer service: a live performance by the legendary Three Stooges. Yes, I know, I just listed four names; I believe this marked the only time that Curley and Shemp ever appeared together. Eventually, Moe, who appeared to be in charge, decided that we didn’t need passports and managed to convince Shemp of this without poking him in the eye. We were rebooked on a flight leaving the next day. We then ask about hotel rooms.

“We only do that for mechanical problems,” says one of the Stooges. I think it was Curly this time.

“You announced it was a mechanical problem,” we point out.

They argue for a while.

“A bird hit the plane,” says Moe.

“Which plane? The original plane or the second plane?”

“A bird hit the plane,” says Moe.

Eventually, they agree to give us discount hotel vouchers. We then ask for our luggage. This triggers more debate before Larry informs us that it will take at least an hour to get our bags since, “no one is on duty.” Fine.

We head on over to baggage claim and start waiting. One of my friends makes a comment about checking with the baggage office. I manage to find it, and right outside the door what do I see? Our suitcases. Apparently, they’ve been sitting there all afternoon. There is also someone on duty. I explain to the woman in the office what is going on. This is the first she’s heard that the flight was cancelled. She releases our bags to us, and then double-checks the status of our flight. She informs us that the computer shows a mechanical problem, and provides us with hotel and meal vouchers. We manage to get to sleep around 2am, and at least get a few hours of rest before coming back to the airport at 11am for our next attempt. This one United agent really went out of her way to help us and made an absolutely miserable experience at least tolerable.

Here’s the problem: good customer service should not require finding the one person in the airport who is willing to do her job. The very fact that happened really says a great deal about how leadership at United Airlines views their customers. Good customer service is about recognizing that when you fail to deliver it’s not just an entry on the balance sheet; at best, it’s an inconvenience for some number of people. At worst, it can be a major problem. The least you can do is take steps to apologize and, in some way, mitigate the damage. Sure, at 12:30am maybe you can’t just book people on another flight that night. But looking for excuses to save the company a few dollars at the expense of your customers is simply foolish. I guess that United assumes that since there are limited choices in the airline business, they get to do what they want. That doesn’t build loyalty and it means that when people do have a choice, they won’t choose you.

Amazon.com, for example, has raised customer service almost to an art form. Whenever I’ve had a problem with a product I’ve ordered through them, it’s been fixed immediately. It’s not just about the choices people have, but the stories they tell about your organization and other how people react to those stories and make choices. Sooner or later, the choices your potential and actual customers make will come back to your bottom line. In the end, it’s the leadership at the top that sets the tone for what the customers will perceive. What are you doing to make sure that you’re leading in the right direction?

The Efficient Light Bulb

As published in The Imaging Executive

Once upon a time, there was a light bulb. This light bulb was quite a remarkable light bulb: it was praised far and wide for its incredible efficiency. This light bulb gave off no waste heat. This light bulb did not contribute to global warming. It had no carbon footprint.  It did not rely on fossil fuels. Truly, it was an amazing light bulb and visitors came every day to see this remarkable light bulb.

One day, though, a traveler coming to see the light bulb in action was delayed by an unfortunate flood that closed several roads. He did not arrive until well after night had fallen. Much to his surprise, he found the light bulb sitting in a pitch dark room.

“Why aren’t you giving light?” asked the traveler.

“Give light!” replied the light bulb in shocked tones. “You must be joking. If I did that, I would use fossil fuels. I would have a carbon footprint. I would give off waste heat. I would no longer be efficient.”

“But isn’t the purpose of a light bulb to give light?” asked the traveler.

“I’ve always been told to be efficient,” replied the light bulb with a shrug. If you have never seen a light bulb shrug, it is truly a wonder to behold. The traveler would have been amazed, except, of course, that the room was too dark for him to see the miraculous event.

Once upon a time, there was a software company named “Soak, Inc.” Soak’s product relied upon a very complex database server. One day, the VP of Engineering stormed into the office and declared, “The server is too slow. We need to speed it up.”

From that day forth, every effort was focused on improving the speed of the server. Other issues were deemed insignificant beside the one, critical, goal of performance. Engineers who dared to raise other issues were publically humiliated for wasting the company’s time. Bugs that did not relate to performance issues were deemed “optional.” People who spent time reviewing the optional bugs and trying to fix them were warned that their insubordination would cost them their jobs if it did not cease immediately.

Eventually, Soak developed an amazingly efficient server. It was fast. It was robust. It was ready to demonstrate to potential clients.

The demo started out remarkably well. The server did not crash, causing some to believe that this couldn’t actually be a demonstration of a software product. Indeed, the server performed flawlessly. All would have gone well indeed for Soak had not someone noticed that the data being delivered by the server didn’t make sense. Yes, what the server had gained in performance it had lost in accuracy. In other words, it was incredibly good at very rapidly delivering useless or incorrect information.

When the engineers were questioned about this unfortunate oversight, they shrugged and replied, “We were told to be efficient.”

While it is not nearly as amazing to see an engineer shrug as it is to see a light bulb shrug, the effects are much the same.

Once upon a time, there was a large company called “Red.” Red Inc. had a team of salesmen who were, it seems, not producing the necessary volume of sales.  While this may have gone a long way toward explaining the name of the company, it was not exactly a viable long-term strategy.

One day, the VP of Sales decided that the problem was clearly that the salesmen were not calling enough potential clients. They were wasting their time. They needed to be more efficient with their calls.

Much effort was spent focusing on the calling habits of the salesmen. They were given scripts. They were forced to practice making calls with various managers listening in and rating them on their performance on these practice calls. Those salesmen who demonstrated too great, or at least too obvious, a reluctance to make calls were dismissed. Those who questioned whether this was the right way to approach the problem either learned quickly to shut up or were also dismissed.

The sales team became very efficient at making calls. Sales did not increase. The remaining salesmen shrugged.

It turns out that even the best salesmen are reluctant to make calls. The problem was not with making the calls. The problem was with projecting the necessary confidence and optimism to attract and hold the interest of the client. Clients, it seems, are not all that likely to buy from salesmen who do not appear enthusiastic and confident in what they are selling. It also helps to know how to close the deal.

In each of these situations, a goal was set, a metric for success was defined, and that metric became the sole determinant of progress. Goals are extremely powerful tools: the best thing about them is that you accomplish them. Unfortunately, sometimes the worst thing about goals is that you accomplish them. In each of these examples, they accomplished their goals. A dead light bulb is extremely efficient, but not useful. Similar observations can be made about the server and the sales team.

Before leaping into setting a goal, especially a goal to solve a problem, it helps to understand the actual problem and to understand what the actual symptoms are. At Red, they assumed that an unwillingness or inability to make calls was the cause of the low sales and set their goals accordingly. We’ll never know how many top salesmen they dismissed because they didn’t realize that even the best salesmen suffer from call reluctance. Rather than create useful goals, they fixated on a symptom. That did not, however, actually change anything.

At both Soak and Red, the respective VPs stated that they were trying to solve the problems their companies were facing as rapidly and effectively as possible. They were setting goals. They were Taking Action! Taking action is certainly helpful, but it is even more helpful to be taking the correct action. Since it’s not always possible to determine just what the correct action is, it becomes even more critical to listen to the feedback and questions from the people who are charged with actually executing the action. The engineers and the salesmen knew that something was wrong, but no one was willing to listen to them. Remember, a key aspect of successful goal setting is understanding the feedback you’re getting.

I realize that many of you reading this are probably chuckling to yourselves and thinking that this scenario could never happen at your companies. The folks at Soak and Red said the same before, during, and even after it happened to them. The light bulb had no comment.

Setting a goal, for example, to be more efficient , seems like it makes sense and certainly feels good. However, it pays to determine if that goal is actually going to get you what you want. Otherwise, you may just end up with a dead light bulb.

Death of a Thousand Knives

As published in Corp! Magazine

Very few companies are ever driven out of business by their competitors.

I’ve found that this statement upsets a great many people, all of whom are quick to jump up and start providing examples of companies that were, in fact, driven out of business by their competitors. This is missing the point. Indeed, it’s rather like a detective in a murder mystery concluding that the cause of death was that the victim’s heart stopped. It matters whether the heart stopped due to lead poisoning, for example in the form of a bullet, or due to some other cause. Indeed, understanding exactly what led to that heart stopping moment is a key part of solving the mystery.

Similarly, while it’s not so unusual for a failing company to have the coup de grace administered by a competitor, how they got to that point makes all the difference. Focusing only on the end point provides a very simple, comfortable solution, but not necessarily a particularly useful one.

Robotic Chromosomes, for example, was a company that dominated a particular niche in the bioinformatics market. They were an early entrant into the field and their products were initially the best on the market.

Over the course of several years, though, they developed a view of their clients as idiots. The fact that their clients were all highly educated research scientists did not enter into the equation. If they had trouble using the software, they were idiots. As a result, the company became increasingly less open to feedback from either clients or the market. While their market share was increasing faster than the market itself, they could get away with that attitude. Eventually, though, their growth started lagging the growth in the market. Phrases like “law of large numbers” and “temporary aberration” were batted about. When their market share started shrinking, phrases like, “temporary aberration” became even more popular. The view of the clients as insanely stupid for buying competing products became more common.

Today, they no longer exist. Were they driven out of business by their competitors? Only in the sense that they put themselves in a position to allow their competitors to drive them out of their dominant position in the market. Sure, their competitors may have pushed them over the cliff, but they were the ones who chose to walk to the edge and lean over.

Now, it may reasonably appear from the preceding description that Robotic Chromosomes was taken down by a clearly defined event, that is, viewing clients as idiots. That is not, however, quite correct. While it may appear that way in retrospect, the reality is that Robotic Chromosomes suffered from a series of cascading errors. Each mistake was small, easily overlooked or ignored. Each mistake led to more mistakes until eventually the company was suffering from so many small cuts that it eventually had no strength left to resist when its competitors moved in. So how does a company avoid this death of a thousand knives?

The obvious answer is that they needed better communications. While true, it again misses the point. Communications is where problems show up, but the communications are rarely the problem. Rather, the dysfunctional communications are the symptom of the problem. It’s critical to look beyond the symptoms to identify the real problem. Otherwise, you spend all your time looking at the wrong things, as Robotic Chromosomes so eloquently demonstrated.

Avoiding that fate requires a willingness to accept negative feedback; it means being willing to hear what people are saying about your product, your service or your management style. If you aren’t willing to listen, or if you structure the way in which you listen to negate the feedback, you’re setting yourself up for failure, one step at a time. For example, creating a culture that mocks and demeans your clients is not a recipe for success, and closes you off from valuable feedback from those clients.

Being willing to accept feedback is only a first step though. You have to create a context in which employees are not afraid to give you that feedback, and in which they believe that providing feedback is worthwhile. If people believe they’ll be punished for being critical or regarded as “not a team player,” it’ll be hard to get them to provide feedback.

Next, you need to clearly define your goals and also define how you’ll know whether you’re succeeding or failing. Robotic Chromosomes had very fluid definitions of success, definitions that shifted regularly to avoid facing unpleasant results. It’s important to separate the evaluation of the feedback you’re getting from the testing to see if the criteria for that evaluation are valid. In fact, verifying the validity of your criteria should be done before you then evaluate your feedback: otherwise, it’s too easy to redefine success and give yourself a few more cuts. None of them seem all that bad at the time.

Step by step, over the course of several years, Robotic Chromosomes successfully created an environment where any negative feedback could be ignored because that feedback was always coming from idiots. Their competitors didn’t drive them out of business. They drove themselves out of business; their competitors simply put them out of their misery. How will you avoid the death of a thousand knives?

Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead (www.7stepsahead.com), an organizational development firm focused on helping leaders grow their businesses. Steve is the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill, and a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play.” Contact him at steve@7stepsahead.com.

The Challenges of Hiring Slow

In an upcoming Journal of Corporate Recruiting Leadership I talk about the perils of “hiring slow” and “firing fast.” As I’ve been doing, I wanted to give you just a taste of the “hiring slow” part here.

A company can hire slow for two major reasons: because they know exactly who they’re looking for and are willing to wait for the right people to apply, or because they don’t know who they’re looking for and believe they’ll know when the right person applies.

The first is more useful. If you’ve done your homework and figured out the characteristics of the employees you’re looking for, and if you’ve trained your interviewers to recognize those people, then by all means hire slow. Take your time and wait for the right people or, better yet, go out and attract them to the company.

Read the rest at ERE.Net

Quoted on “Embracing The Competition”

I was just quoted on how to embrace your competition. No, it doesn’t involve a knife in the other hand 🙂

http://bit.ly/EmbraceCompetition

In the end, if you can make the pie bigger, you both win.

If It Ain’t Broke…

There are a great many ways to complete the phrase, “If it ain’t broke…” The classic, of course, is “don’t fix it,” but I’ve found that “then it doesn’t have enough features,” is also pretty popular. While some other popular endings include “then you haven’t hit it hard enough,” “clearly it’s unbreakable,” and “don’t upgrade it,” for the most part, they’re variations of the first two.

Read the rest at Enterprise Management Quarterly.

Mercky Research

Not long ago, an article in the New York Times discussed how Merck created what appeared to be an independent, peer-reviewed journal, and then used that journal to convince doctors to prescribe Merck products.

What is particularly amazing about this story is that Merck is the same company that 20 years ago created a cure for River Blindess, even though they knew that the people most in need of that cure would never be able to pay for it. At the time, the cost to the company was estimated at $200,000,000. Then CEO Roy Vagelos said that he felt that there was really no other choice: he was living up to Merck’s ideals of “health before wealth” and “do good and good will follow.”

As things worked out, the long-term benefits to the company, in terms of prestige, being able to attract top-notch researchers, and access to emerging markets, were immense. Merck did good, and good did indeed follow for the company and its shareholders. It just wasn’t obvious at the time that things were going to work out that way.

So what happened?  How did a company that lived up to its ideals as Merck did come to be the same company that used rather questionable practices to convince doctors to use its products?

Now I have no particular contacts or channels into the brains of the people at Merck, so what follows is purely supposition based on observing similar patterns of behavior in sports and business.

It’s well known in sports that athletes who are solely focused on winning do less well than those who are focused on personal excellence and skill mastery as well as winning. Indeed, a total focus on the outcomes and not the process can lead to a number of problems, including depression, burnout, and reduced enjoyment in the activities. Failure, instead of being a learning experience or an opportunity to evaluate and adjust, becomes something to avoid at all costs.

Ways of avoiding failure might involve only facing easy opponents, or it might involve cheating in various ways. Fear of failure is a very powerful force; the most successful athletes are those who master the art of learning how, and when, to not care if they win or lose.

When a business becomes totally focused on making money, it falls into a trap similar to that of the athlete. Milton Friedman to the contrary, a business cannot be solely about making money. Rather, a business is about producing innovative, or at least useful, products and services. These products and services must, in some demonstrable fashion, provide value to people. Money is how the business knows it’s succeeding.

Like sports, however, when the focus becomes too short-term and too outcome oriented, it becomes increasingly easy to justify behaviors that make money now instead of behaviors that maintain the product pipeline. It’s really no different from the athlete who sacrifices long-term health or career for a victory today. Living up to ones ideals is easy when things are going well; it’s when things get difficult that the real test comes.

Being a successful athlete, at any level, takes a great deal of work and dedication. There are always people who are looking for short-cuts. Being a successful company takes work and dedication as well; staying successful is, arguably, even harder. Over the years, very few have managed it. The tendency to take short-cuts is always there. It’s the businesses that stick to their ideals and are not captured by the fear of failure that last the longest and are most likely to survive the inevitable tough times.

Just as in sports, it’s all about learning how, and when, to not care.

Right To Midnight

“Left or right?”

“Right to Midnight.”

I had this conversation recently with my 3.5 year old son. We were in the car, and he had just dropped his favorite stuffed animal, a black cat named Midnight. He couldn’t reach it, and I was feeling around trying to find it for him, while he kept telling me I was near Midnight. When I finally tried asking him if I should move my hand left or right, his response was that I should move my hand, “right to Midnight.”

Now the fact is, a 3.5 year old doesn’t really understand that I don’t know what he knows: after all, he can see my hand and the cat, therefore I should know which way to move. This sort of thing is not at all unusual with young children. For the most part, it’s generally pretty funny.

It’s much less funny when senior management is in the role of the 3.5 year old, and the employees or customers are trying to figure out what is going on. Young children haven’t yet learned to consider other perspectives; management, on the other hand, doesn’t have that excuse.

Many people are familiar with companies that put out products with incomprehensible interfaces or unreadable documentation, and then become highly irate when the customers complain that they can’t figure out how to use the product. I worked with one high tech company where the CEO and engineering team routinely described their customers, primarily research scientists, as a bunch of incompetent idiots. They simply could not understand why their customers could not understand how to use the product. After all, the CEO and the engineers understood it.

Fortunately, very few people are going to argue that a company needs to get input from its customers and involve them in the design process. After all, that’s the best way to make sure you’re giving them something that they’ll be happy to spend money on. The real problem arises when the company’s internal communications are lacking. It is, sadly, not at all unusual for management and engineering, or engineering and sales, or any other combination of departments to be talking past each other. The groups are nominally all working for the same company, but none are capable of recognizing that the others don’t know what they know or cannot imagine that different groups within the company have different, equally valid, priorities.

Engineers, for example, are most concerned with building elegant, effective solutions to problems. Salesmen want to sell product. Documentation wants to describe what the product does. Customer support wants to help the customer actually use the product. Managers are trying to meet deadlines and generate revenue for the company. It would seem that everyone is on the same page. The reality, though, is far different. The engineer’s elegant solution may be brilliant, but impractical: for example the engineer who suggested driving bolts into the side of my house to hold up a sunshade for an afternoon. While that would have solved the immediate problem, it was just a bit of overkill and could easily have caused other problems down the road. Salesmen may promise features that engineering can’t implement or management, in an effort to close a deal, might set overly aggressive deadlines. A case in point occurred in one company I dealt with, when the CEO turned to the VP of Engineering and asked when the product would be ready to ship.

“September 1^st,” said the VP.

The CEO turned back to the phone and said, “We’ll have it for you on July 15^th.”

The CEO simply could not understand why engineering couldn’t have the product done by July 15^th, and the VP of Engineering simply could not understand why the CEO couldn’t accept September 1^st. The net result was that the product ended up shipping on October 1^st, delayed by a constant series of unmeetable deadlines.

When I’m telling this story, someone always says to me that the two people simply needed to communicate better. True, but not very useful. If it were simple, they would have done it. Under the pressure to get a product out the door, each one forgot to stop and get the full picture. Their frames of reference narrowed to the point where they could not imagine any other answer than the one they had locked onto. Whether two people or ten people are involved, it’s important to stop and ask four critical questions:

1.      What do I know that they do not know?

2.      What do they know that I do not know?

3.      Do I actually have enough information to make a decision?

4.      Are we really all on the same page?

Taking the other person’s perspective can pay off in a big way. What’s stopping you?

The Best Customer Service?

It’s definitely the time of year for parties. The economy being what it is, it’s also the time of year for stories about employers. Some of the interactions are more amazing than others.

The names are withheld to protect the silly.

Someone, we’ll call him “Ivan Tadeov,”  was talking about how the firm he works for provides cell phones to several thousand of its employees. The firm, a large, well-known New England company, will be referred to as the “Einstein Company.” 

The Einstein Company provides these cell phones so that key employees, particularly in sales, can be available 24/7. However, in order to save money, they recently decided to restrict the use of these phones to business only. In other words, employees are now being expected to carry around two cell phones: one for business use and one for personal use. 

The net result: at least some employees are (gasp!) leaving their work phone at work. How unreasonable of them!

A psychologist in the room, we’ll call him William James Hall, asked why people need to be available 24/7. Ivan replied that this way customers can always reach “their” sales person.

Dr. Hall: “Even at 3am?”

Ivan: “Even at 3am.”

Dr. Hall: “Why?”

Ivan: “It makes the customer feel good to know that they can always reach their sales person.”

Dr. Hall: “Psychologists deal with suicidal patients  and we aren’t available 24/7.”

Ivan: “Well, I guess the tech industry just has better customer service.”

Let’s look at this for a moment. We’ll leave aside for the moment the concept that restricting the phone usage to business calls only will save money. Most phone plans are fixed price for a given number of minutes. So long as people aren’t exceeding those minutes, it shouldn’t be a problem. Of course, I suppose the Einstein Company could be paying by the minute. Then again, if a large corporation that is buying thousands of phones can’t cut a deal with the phone providers, they really do have a problem. But let’s move on.

The first problem is that the Einstein Company apparently forgot why they provided people with cell phones in the first place: accessibility. By making the phone convenient and free, they removed the barrier to getting people to keep them on all the time. Sure, most people carry cell phones all the time; but most spouses take a dim view of having dinner, or other activities, interrupted. Also, people will generally turn off their phones when attending a movie, concert, fancy dinner, and so forth. By providing employees with free phones, Einstein Company successfully created a sense of obligation on the part of the employees to keep those phones on all the time.

And then, in one fell swoop, they removed that sense of obligation and made carrying the phone inconvenient. What next? Fire anyone who doesn’t answer the phone? What about people who travel outside of the coverage area? 

Even more interesting, though, is the concept of what constitutes good customer service. 

I can accept the concept that it might make some CEO feel good to know that he can always reach a particular sales representative at any time, but is that really going to help him? Wouldn’t it make more sense to talk to someone wide-awake and coherent, able to analyze his problem and help generate a solution? I would think that a company of several thousand employees world over can maintain a night shift. 

Fact is, getting your doctor at 3am or your psychologist or your massage therapist, or, for that matter, your car mechanic, child’s teacher, or ski instructor just isn’t going to happen. You’ll get a doctor at 3am if it’s a genuine emergency, but it’ll be whomever is on duty that night. 

Do you really want people short on sleep making critical decisions or attempting to solve a complex problem? People talk all the time about staring at a problem for hours and then solving it in five minutes… after they’ve had a good night’s sleep. 

Of course, if the problem isn’t that complex, or the situation isn’t that critical, why the 3am call?

The real point here is whether or not this 24/7 availability is actually benefiting the client. Are they getting the best possible help this way? Or are they getting an illusion of responsiveness that will actually delay their getting what they need?

A final thought… the reason you won’t get the psychologist (or the massage therapist) at 3am is that they’ve learned something critical: “you can’t give what you don’t got.” In other words, if you don’t take care of yourself, you can’t be of much use to anyone else. 

Something to think about.