It’s a story about community and collaboration on a scale never seen before. -Lev Grossman, Time Magazine
The Urge to Connect
History shows that that when robust tools serve a powerful human drive, revolutionary changes occur. That’s happening now as social media enable people to satisfy their primal urge to connect with each another. Social media are ubiquitous, cheap, and accessible, and their widespread use is having a profound impact on business.
While the technology is grabbing the headlines, the more interesting story is how people around the world are using social media. They’re fulfilling their desire to connect with each other, forming communities in the process. The communities function like virtual beehives — amorphous, dynamic structures where members coalesce to share information.
Smart companies recognize the commercial value of communities. They treat community members more like stakeholders than consumers. Instead of broadcasting their messages at them, they engage followers in dialogue. In time, followers can be converted to evangelists. In a hyper-connected world, evangelism carries messages fast and far, boosting the value of the brand.
Over the last few weeks, my colleagues and I presented value propositions to separate audiences in Europe, Africa and the Middle East. Clients in each of these markets face unique challenges and opportunities to be sure. Our offerings addressed their different needs, but our approach is fundamentally the same everywhere.
Our work consists of three steps:
1) Develop a better understanding of customer needs by getting closer to customers and engaging them wherever possible,
2) Use customer insights to continually improve offerings,
3) Deliver a customer experience that’s better than the rest.
The good news is that these steps apply to clients everywhere, despite cultural variations. The not-so-good news is that succeeding with these steps is almost impossible unless there is substantial buy-in at the highest level in an organization.
“The formula is simple and it’s reduced to four words every kid in the world knows: Tell me a story. It’s that easy.” -Don Hewitt
Last week, Don Hewitt, founder and long-time producer of 60 Minutes, died. He’ll be remembered, among other things, as an impresario who created one of TV’s most successful programs. There’s a potent lesson for all of us in his “storyline”.
Hewitt’s vision and instincts culminated in a new, highly successful form of entertainment known as the “news magazine”. As important as that accomplishment is, his greatest feat may be his proving that story-telling is the key to success, not only in TV, but in every medium. We, in business, have much to learn from Hewitt’s dogged pursuit of the story.
If you use Twitter or any of the other social networking tools, you’re bound to notice how much people crave acceptance and appreciation. Twitter users are delighted when their posts are re-tweeted (re-quoted) or commented on by their followers.
It’s obvious that people like being shown appreciation, but there’s more to being appreciated than meets the eye. Social scientists say we’re hard-wired to respond powerfully to appreciation. In fact, the quest for acceptance and appreciation may be one of our stronger drivers.
When we’re validated by others, we’re inclined to bond with them. I call this the Validation Principle, and it’s one of the keys to building durable customer relationships.
The notion of trust-building in business is gaining lots of attention these days. People crave trust more than ever before. In a world of complexity and uncertainty, where our vaunted institutions are faltering, consumers are drawn toward trustworthy brands, and away from those which are unreliable.
During uncertain times like these, having a trustworthy brand is a strong competitive advantage. Yet few companies intentionally take steps to engender trust. Organizations ought to instill trust in their brands with the same fervor that they pursue new business or cut costs.
You never know with these things when you’re trying something new what can happen. This is all experimental. ~Richard Branson
Over the years, there have been surprisingly few breakthroughs in the airline customer experience - until recently. Sir Richard Branson’s venture into the U.S. market, Virgin America, (VX) is redefining air travel by providing passengers with a fresh, distinctive on-board experience. The carrier is less than two years old but it’s quickly becoming a template for what’s possible in the future.
The choices VX is making demonstrate a “customer experience mindset” that’s all too rare in the industry. It’s evident that the VX team devoted their attention to passenger comfort and convenience. Features “baked in” to the customer experience include seats with power-outlets and USB ports. Cabins in their new A320s have soft mood lighting.
I’ve recently noticed a subtle but perceptible attitude shift among Americans working in foreign markets. My overseas colleagues are noticing, too. American business people, they say, are displaying more thoughtfulness than usual. U.S. companies operating overseas seem less inclined to approach global business as though its epicenter is in New York or Palo Alto.
It’s too soon to call this a new Zeitgeist, but change is in the air. The global economic crisis, which has its roots in the U.S., may be partially responsible. I think the new vibe is also influenced by Washington’s new tone in its approach to global affairs. As an American doing business abroad, this is promising.
Historically, many American firms have approached business from a decidedly ethnocentric perspective–more so than many of our European rivals. U.S. companies have missed opportunities as a result.
Things seem to be moving in a better direction now.
It’s time to dispel the epic business myth about the importance of Customer Satisfaction (a.k.a. “C-SAT”). Lots of companies rely on their C-SAT scores to tell them how well they’re serving customers. But many organizations substitute C-SAT tracking for talking with the people they serve. At these firms, C-SAT is their Achille’s Heel.
Let me be clear. It’s crucial to satisfy customers’ needs and preferences. It’s also vital to know how customers perceive your offering so you can pinpoint areas that need attention. But, C-SAT misses a critical piece of the puzzle. It doesn’t indicate customers’ intention to remain loyal to your brand. If they’re defecting, it doesn’t tell you why.
Studies show that customers can be reasonably satisfied with your offerings yet still switch away from your brand. In fact, they may be extolling your brand’s virtues even as they’re signing up with your rival. If they do intend to stay, C-SAT won’t tell you if they’re inclined to buy again. And, you can’t know if they’d prefer to get your service through a different channel. At best, C-SAT is a barometer of how customers perceive your brand based on their prior experiences with it.
It is with the heart that one sees rightly; what is essential is invisible to the eye. ~Antoine De Saint-Exupery, The Little Prince
Business stories about “empathy” are springing up again. BusinessWeek ran one (Empathy = Growth) last week. Fast Company covers the subject periodically. Authors are urging readers to consider the merits of empathy despite the need to cut operating costs as demand for services declines. It makes sense for businesses to re-evaluate their customer relationships in this environment. I think empathy remains widely misunderstood and its role is undervalued in the business community.
Simply put, empathy is rooted in the capacity to see the world through the eyes of another person. Empathy enables a provider of service to recognize the buyer’s feelings, needs, and wants in order to fulfill these drivers through various means.
I’m interested in a broad spectrum of “relational competencies,” including empathy, and how they are used in business. Skillful practitioners use these competencies to show their understanding, respect and appreciation for others. These skills include self-awareness and various social competencies that enable the practitioner to listen to and validate customers which forms the basis of relationships.
The events of the last quarter have radically changed the game plan for service providers around the world. Business rules are being rewritten; success is being measured by new criteria. Investments in your business must produce greater returns as “breakevens” are reduced. In these times, it makes sense to rethink what you offer and how you present it to your customers.
While it seems like everything has changed, the axioms of business remain constant. Customers still want exceptional “value” – in fact they’re demanding it. They’re more motivated than ever to look for it. If they can’t get it from you, they’ll go to your rivals. They’ll find value in new, atypical ways to get their needs met. Help them solve their problems and the market will beat a path to your door.
Delivering exceptional value in lean times requires smarter tools and an atmosphere that encourages collaboration and continuous innovation—always thinking: how can we make this better, cutting out what’s unnecessary.
Some comments I’ve received from readers indicate some confusion about what’s I mean by ‘analytics’. Let me try to clear that up. At my company, we use the term to mean the approach to as well as the practice of mining and analyzing data as well as the tools and practices.
Our practice is concerned as much about the human and organizational issues enabling the successful application of business intelligence and analytics. These include management vision and commitment, organizational alignment, culture, and skills. We’ve learned that buying “yet-another-tool” seems easier than solving these broader challenges, but it’s rarely the answer companies are looking for.
The most successful practitioners of analytics somehow manage to create an environment where decisions across boundaries are made on the basis of evidence that comes from rigorous analytics. Management at those companies enncourages a “test-and-learn” approach to refine products, services and offers. So analytics encompasses the tools and practices that produces insights as well as the way the company uses the insights to contour its offerings. Hope this is helpful.
The insightful magazine, Chief Learning Officer, released its 2008 Business Intelligence report [exec summary here] covers trends and practices in the world of corporate learning and talent development. They sampled over 1,400 heads of learning organizations in the US market. It’s a thorough, informative report that offers a comprehensive view of the industry—this is the 4th year they published it, and it gets better every year.
Respondents identified new waves in the industry – novel practices and technologies, innovations, what’s hot and what’s not in the world of enterprise learning.
These executives were also asked what they look for from a learning outsourcer. Their answers aren’t surprising but, as a set, they’re a useful guide for what most clients are looking for from any services outsourcer – be it a learning, contact management or business process partner. It’s great advice for any of us who design and deliver services, especially knowledge-based offerings:
“Be clear about costs from the beginning.”
“Be honest in what you can provide.”
“Do your homework and get to know the company before the engagement.”
“Better understand a customer’s needs.”
“Don’t sell me your programs and services…Sell me what I need…customize.” [emphasis mine]
“Always remember that one size does not fit all and the client is always right.”
“Establish a clear vision for deliverables and process.”
“Customer service should always be a top priority.”
“Differentiate yourself in the marketplace. There are a lot of choices.”
“Listen, listen, listen.”
“Always put quality first.”
P.S. – What a useful checklist for anyone at any level in the service biz, in this market or any other…
What’s next? Web 2.0 is revolutionizing the way companies operate. Mass collaboration is already having a profound effect on the way we work. Blogs, JAMS, collaborative filtering, tags, feeds and wikis are fundamentally changing the way business knowledge is created and, despite some new challenges, what’s not to love?
Describing the upheaval as a social revolution isn’t mere hype. Even though mass collaboration, on a global scale, has just begun, encyclopedias, airplanes, software and a host of products and services are being created by distributed teams across oceans.
P&G was struggling until it shifted to a mass collaboration-driven R&D model several years ago. Their success in creating new products and gnerating incremental revenue captured the minds and hearts of analysts around the world.
My company is taking part in wiki-based client-directed efforts. Team members in Chicago, Seattle and Dublin are collaborating on projects for clients in Capetown and Milwaukee.
The immediacy and accessibility of wikis leads to an informal, roll-up-your-sleeves setting. And it’s not just atmospherics at play. Under the right circumstances productive wiki-brainstorms tend to occur…
There are many new challenges concerning how to structure problems to enable multiple teams to work on them and how to manage organizational networks of collaboration. This is fertile ground for social networkers and other theorists to explore. We keep abreast of emergent practices across industries but some of our best insights come from direct experimention.
The spirit of enthusiasm and experimentation drive our best wiki effots. And I can’t begin to describe the pure joy of escaping the shackles of e-mail. What’s not to love? To be continued…
Elite service companies are tapping their growing pools of data to make better decisions. Market leading businesses focus on collecting the right information and interpreting it for improving their internal process and for engaging their customers. Leveraging the emerging discipline of analytics, or expertly managing and interpreting business information, gives companies a decisive edge.
It seems axiomatic. The more a company knows about the people it wants to serve, the better able it is to create offerings they prefer, to develop targeted messages, and to extract more value across the customer experience.
This Spring, my company launched Value-based Analytics, a model for measuring what your most valuable customers need and want (”value drivers”), and the ways that client’s services meet and don’t meet those drivers.
Many companies are adrift in a sea of numbers. But for those with a clear understanding of how quality business intelligence can be used to make sound decisions, these really are the halcyon days of analytics.
It is increasingly feasible for enterprises to tap information to handle more granular segmentation, low-cost experimentation, and customization. Data mining and speech analytics tools are increasingly affordable and are leveling the playing field, even for mid-range players. The quality and availability of information are both rising while the costs of managing information are falling.
Many service firms that collect information obsessively are paralyzed by the reams of data. Choosing the right information to extract and interpreting it accurately require focus and fine-tuning. Like any other enterprise capability, analytics ought to be tied to business strategy.
Before jumping into the deep end of the pool, there’s a caveat. Building analytical capabilities across the enterprise often challenges the orthodoxy. Shifting to a more analytical approach upends legacy systems and undermines the status quo. Information is power and, naturally, some managers see a full-scale analytics initiative as threatening.
Transforming the company’s analytical capabilities is always an exercise in change management. Firms that rely on expert analytics – tools and mindset — to make better decisions stand to gain a valuable competitive advantage at a time that such advantages are increasingly harder to come by.
Want more info on this subject? Here are two exceptional resources:
I think what sets our company apart is our obsessive inquiry into what works today and what will work tomorrow. Asking what’s next inspires more creative thinking, while broadening the conversation. This dialectic prompts even more questions: How can companies across industries and continents succeed in an ever-flattening world where competitors are hungrier and customers more demanding?
How does a telecom firm in Ontario inspire new ways to extract value for companies in Doha and Johannesburg? How does an airline in Singapore show a high-speed rail company in France how to deliver a more seamless customer experience? How does a leading British hotel chain show a new comer in Dubai how to anticipate customer needs?
More broadly, how can what works in one market be transferred to another? What works in mature markets and in emerging ones, and in all markets? What works today, and how can it be adapted in tomorrow’s market?
What has worked and probably what will work ahead? It’s not more bells and whistles or silver bullets, but a clear, customer-driven focus—new, creative ways of mobilizing talent and allocating resources to fulfill the brand promise consistently, reliably and efficiently.
About the ’creative’ part. It’s essential, but so elusive. Our experience shows that the most creative leaders “see” — patterns and trends — that others don’t. Innovative leaders design their service models to take advantage of them . By recognizing drivers that others don’t, true innovators overcome constraints that their rivals consider to be immutable.
However, leaders typically struggle to explain how they did it, and they often attribute it to good fortune. We’re convinced that game-changing results can be generated repeatedly. But doing so requires challenging the tendency for habitual thinking.
So, what also sets us apart, I think, is our incessant curiosity. We’re looking for ways to foster collaborative intelligence and build communities of knowledge and practice.
We’re always on the hunt for novel tools and practices that can create substantial value. And we experiement, harnessing the best, most practical ones. We do all of this, of course, while obsessively probing the ultimate questions: What’s next, and who will figure it out?
The duo discusses their book in the New Age of Innovation blog where Prahalad asserts that our industrial system has reached an inflecton point.
He writes,
“Ubiquitous connectivity (e.g. cell phones and PCs), digitization, convergence of technology and industry boundaries (e.g. consumer electronics, computing, communications), and the emergence of social networks have collectively put a turbo charge on this transformation. This transformation is affecting all industries.”
The transformation, he argues, is changing the way firms create value and, therefore, the way we all work.
He poses the following questions:
a. How are these trends playing out in your industry? Obvious impact (e.g. advertising, music industry) or subtle but significant (e.g. insurance) or weak signals for now but accelerating (e.g. shoes)?
b. Is there an emerging consensus among your colleagues on how it will transform the way you work? The way you approach your customers?
c. How will it impact the work of CIO/CTO/HR professionals? How well prepared are you for the changes needed in the basic approach to the function and the new skills needed (e.g. global project teams, flexible and resilient business processes)?
d. Will the nature of relationships between the CEO, business unit managers, and CIO/HR change? Should it?
e. Do your colleagues see IT as strategic or do they still persist in believing IT does not matter?
This transformation in business is dramatically changing the way firms will create value. How shall we adapt our business models to operate successfully in the new paradigm?
We’re developing, in successive approximations, a hybrid model of delivering premium training to emerging companies—those emerging regions that are clamoring for competitive capabilities to succeed in a world with more competitors along with more demanding customers.
It features, among other things, ”modular” content design which enables us to reduce development cycles and labor without compromising content quality. A new quick-check knowledge management system is powering this effort.
Today, many organizations offer innovative solutions for improving knowledge transfer, as well as products that enhance the learner experience. But, we want to go further by translating our vision for delivering premium learning services to emerging markets where we can achieve superior learning outcomes at significantly reduced costs.
We aim to further our mission of creating substantial business impact through initiatives designed to provide research-based solutions, expertise and structured peer interaction.
And, of course, we must do all this without compromising quality. Not easy, but worth the effort to be sure.
The sweet spot in business consulting is showing clients something they’ve never seen before. That was the concensus of our consulting team’s work last week at our mid-quarter summit as we reflected on our problem-solving techniques. It was our second foray reflecting on how we solve problems, and we agreed we’ll do it again later this year.
We concluded that we’re most successful in discovering fresh insights about an intractable problem, when we step way back to see the problem from a different perspective. We strive to intentionally shift our point-of-view in order to see the problem in a new light. We turn the problem on its side, and upside down, and inside out, etc., and we don’t stop, until an epiphany occurs—a moment of clarity in which we discover a whole new way of seeing it. In short, we assume a different relationship to the problem.
By shifting our cognitive framework, a creative solution almost invariably emerges. In fact, it’s been there all along — as Aldous Huxley observed –it’s just been indiscernable. Hidden in the weeds because our cognitive biases keep us from from seeing it.
When figuring out how to solve a customer’s problem, the tendency is to come up with a concrete, linear solution that eliminates or “works around” the root cause of the problem. Ironically, some of the best solutions arise from a non-linear approach. For instance, a major breakthrough in computer printing technology was made possible by creating a new language (called “Postscript”) for communicating from a computer to a printer. We came up with several illustrative examples of break-through solutions like this.
The key to creative problem-solving is to get outside of our conventional “framing,” and see it in a different context. Change the composition of the problem, or the lighting. Walk away from it.
Seeing the problem differently requires first checking one’s judging mind at the door to the extent possible. Don’t worry. You can always re-assert your cognitive framework and linear, analytical mindset when you get done or, better yet, revise it.
Last week’s conversation about applying creativity to problem solving was very insightful. We left convinced that we can improve our capacity for creative problem-solving by tackling many different kinds of problems – gardening, oil painting, learning a language, teaching a child, eradicating malaria — in addition to solving the kinds of problems we get paid to solve…
Over the 18 months, we’ve had our share of success working with clients’ high performing business teams. One team at a U.S. telecommunications company was so successful in improving the organization’s customer service that the ad hoc unit was commissioned by senior management to operate as a permanent fixture—a dedicated service quality team.
The unit’s mission is to continually improve service levels at their contact centers while minimizing operating costs. In a relentless pursuit of their goals, they’ve left no rock unturned. And, as the team matures, they seem to be out-doing themselves by every measure. Team members are competing with each other while working as a cohesive unit. They somehow manage the complexities of group dynamics, including decision making, power, and conflict. It’s a thing of beauty.
I have to ask, why do high performance teams succeed where other change interventions fail? What attributes do successful change teams share, and what can we learn from teams that can be applied to other organizational situations? Can the attributes that successful ad hoc teams share be transferred to routine operating units? These are questions that my colleagues and I are going to be taking up.
In the meantime, here’s what we see. High performing teams demonstrate a substantial capacity to drive an organization beyond its traditional boundaries. They stimulate creativity making the organization more adaptive to market forces, while tapping its intellectual reserves.
High performing teams reflect the company’s mission and values through “distributed leadership” at every level — individuals who transmit consistent messages about the company’s vision and direction for realizing change.
High performing teams possess a clear purpose, and communicate that effectively throughout the broader organization. Team members trust and respect one another. And they aren’t afraid to engage in conflict to identify insights that can be applied to advancing the initiative. Once they commit to a decision, they assume a common of action.
The most effective teams see the big picture. The members see the challenge in the context of the team’s work including the relevance of his or her job and how it impacts the effectiveness of the others and the overall team effort. Seeing the big picture promotes greater collaboration, increases commitment and drives quality.
Top teams understand their goals in concrete, measurable and commercially-relevant terms. Each goal includes key measurable metrics (that are available to everyone on the team), which can be used to determine team effectiveness. Understanding and working toward these common goals as a unit is crucial to the team’s success.
An effective team works collaboratively and interdependently. Collaboration and a solid sense of interdependency defuse blaming behavior and stimulate opportunities for deeper insight. Without this sense of interdependency in responsibility and reward, blaming behaviors can occur which will quickly erode team effectiveness.
Can “fixed” operating units be imbued with these qualities? My colleagues and I are on the fence about this one. It’s a big question and the answer is likely to be the kind of big idea that can move organizations forward. I hope to post the results of our on-going dialogue and findings about this subject…
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