No..?

Neither have I, thankfully, but I now know someting of what it must feel like.

You see, I attended a brainstorming session on Management Development last week, one which went very badly.
I won’t bore you with the gory details, but suffice it to say that everything that could go wrong seemed to do so.
For starters, the setting didn’t help: a window-less conference room with bad lighting which was probably a bit too small for the numbers attending.
But, as far as I could see, it was mostly the facilitator’s fault that the session bombed.
He hadn’t a clue what he was doing and the event went on far too long, lacked control and simply became a discussion of his ‘preferred’ ideas rather than a true brainstorming event.

Now, don’t get me wrong – and in case you think I’m being arrogant, I’m really not – but the guy let himself down as much as anyone else.
He had a room full of managers, consultants and a couple of academics at his disposal – all volunteering their time – and it seemed to me as if he hadn’t bothered to prepare himself at all.
Now, I’m am no expert on managing brainstorming sessions – so that’s why I don’t run them.
This guy clearly wasn’t one either, but he was having a go at it.

Anyway, one of the things that I, and others, found most annoying about the session was that when anyone suggested something that didn’t fit with his view of what should be suggested (whatever that was), he kept saying, “We’ll just park that one for the moment, shall we?”
And there was a tone to how he said it too.
After the first few times, the guy seated next to me kept muttering under his breath, ‘I’ll park you in a minute mate.’ every time the facilitator said it.
About half-way through, a couple of participants even walked out.
So, you get the picture of what the event was like.
A pretty painful experience.

Still, hard as it was to take, the session got me thinking about brainstorming; actually, it was more than that, it got me thinking about idea generation and just how vital a function that is in any business, especially with regard to getting ideas and suggestions from employees.

All companies need new ideas.
And particularly so in these troubled days.
Employees, customers, competitiors and indeed, other ‘best in class’ businesses, can all be valuable sources of new ideas.
But, for today, I would like to focus on employees as a channel for new ideas.
You may already have an approach to employee idea generation in your business or department, or maybe you don’t.
Whatever your current situation, I think the following points are worth considering and they might help you to develop a new model, or revise your existing approach.

1. Context
The first point I want to make on the issue is that before you do anything in this area, or even consider revising your existing approach, the broader ‘context’ within which any approach to employee idea generation operates is an important consideration. In particular, I want to flag a couple of concerns here:

Engagement levels
Ultimately what really drives interal creativity and innovation is having managers and employees who are fully engaged with each other and with the business.
People need to have a real commitment to the company and a desire to be the best at what they do; without this, the potential for new ideas will be limited or confined to the truly dedicated few.

Focus of ideas
Also, many companies see ideas generation primarily as part of employee welfare and motivation efforts and use suggestion boxes, or other tools, in a relatively limited way to find out about issues or blockages in the work environment which may be impacting on employee satisfaction.
And I am fine with that.
But I would always push for more.
Yes, you should seek employee ideas about problems/issues/concerns in the workplace to support your efforts to improve engagement levels, but we pay our people to ‘think’ as well as ‘do’, so you want them to be suggesting ideas across all aspects of business performance and not just on matters that directly affect them – which is essentially driven by self-interest.
You want them to also have the interests of the business at heart too and make suggestions on that basis.

So, as a first step, give some thought to this broader ‘context’ and how it applies in your business or department at present.
Do you have an engaged bunch of people around you? If not, you’d be best to work on that issue first.
If you already have ideas generation mechanisms in place, do they seek suggestions across all business dimensions? If not, can those existing tools be adapted to garner a broader range of ideas?

2. Structure
The next point I want to make is that ‘ideas generation’ should never be an ad-hoc activity. Key elements in any frameowrk for managing employee ideas and suggestions would include:

In applying this broad framework in your business or department, or when reviewing your existing approach, consider the following:

How are ideas generated?
In terms of generating as many ideas as possible, they are a range of ways in which you can get suggestions from employees: meetings, job chats, appraisals, brainstorming, surveys, benchmarking trips and of course, suggestions boxes, are all valid channels.
Of course, how effectively each of those channels is used and managed is a concern too.

I find that a lot of companies use ‘suggestion boxes’ as the primary mechanism but in my experience the box approach rarely works well.
Or, it works, but only under limited circumstances.
Or, it works well for a while, but then dies a slow death.
Or, it works in terms of the number of ‘suggestions’ received but generates little of value beyond nonsensical ideas, or worse still, petty gripes which are of no value.

Let me give you a simple example of what I mean.

I once came across a situation in a client company, where the suggestion box was to be found tucked away in the corner of the canteen, looking all lost, lonely and under-utilized.
In fact, it’s main function seemed to be to provide a flat surface where dirty cups could be deposited.
In discussing the issue with the HR manager in that business, I suggested that she take the box away for a week to see what happened.
So, one evening after most people had gone home, she removed the suggestion box from the canteen.
The result?
Nobody even noticed that it was gone. Not after a week. In fact after a month, not one employee had missed it.
They already new it wasn’t working as an approach, seeing as they rarely got ideas deposited in it, but taking it away simply confirmed just how futile it was.

And, I have seen suggestion boxes failing for many such reasons over the years; actually, I have rarely seen them work.
So, if you do go with the box approach, recognize its severe limitations, and try to use it in as create a way as possible – hey, why not even make it an online option?

My preference for generating ideas from employees, though, would always be to solicit them directly through departmental and other staff meetings.
Make ‘idea generation’ a regular agenda point, so that employees come to understand that ‘making suggestions’ is part of what is expected from them in their role, and not a ‘nice-to-do-if-they-feel-like-it’.

And, whatever route you go here, instead of just giving general headings for where you want suggestions focused, or worse still allowing a blank canvas, why not give them some sentences to complete, maybe along the lines of:

- I could do my job more effectively if…
- I think we could increase customer satisfaction levels if we…
- I believe that teamwork could be improved if…

By doing this and similar, you cut out the potential for meaningless gripes and instead focus suggestions in areas that include employee satisfaction issues, but also cover broader business performance.
That’s good for them and good for you.

How are ideas gathered?
The critical point here is to ensure that any idea suggested, no matter its value, does not disappear into some black hole never to be seen or heard of again.
For one, doing so means that it won’t be long before employees stop making suggestions altogether, but also without a clear system for gathering all suggestions and ideas from the various channels you use, potentially winning ideas can slip through the cracks.

So, have a process – with defined responsibilities – in place for gathering all ideas generated from the differing generation mechanisms used.
And make sure every employee receives an acknowledgement of their idea.
Standard letters don’t count here either. That’s insulting.
If someone does make an effort to submit an idea, the least they deserve is some form of personal acknowledgement – be that verbally or in writing.
Thank them for taking the time to share their idea, let them know the process and timing for evaluating that idea and for when the decision to use it or not will be made.

How are ideas evaluated?
Again, there needs to be a bit of structure here.
Think about:
Who’s involved in the decision-making process? What are the criteria for selection of ideas? Within what timeframe are decisions taken and so on?
And when a decision is made, let the relevant submitter know the outcome – be it that their idea has been taken on board, or that it hasn’t.
Even when their idea isn’t adopted, by explaining why, you at least don’t discourage them from making more in future.

How are ideas implemented?
The key point I want to make here is that you should always include the
submitter of the idea in the implementation process.
After all, it’s their idea and they will likely have lots more valuable insights into how it can work in practice.
Apart from anything else, they will feel valued by inclusion and this will not only influence their own level of engagement, but they will likely spread the good news to others too.

How is impact measured?
I won’t say too much here; it’s pretty obvious, there should always be some measurement system in place to track the benefits and impact of actions implemented.

There is another important point to consider here about employee suggestions, which is admittedly open for debate.
Many companies financially reward employees for ideas implemented – and I know this goes against what many believe – but I don’t think that’s a smart idea at all.
To me, it sends out a message that we will reward our people extra when they use their ‘brain’ as well as brawn.
Okay, maybe in exceptional circumstances if an employee idea saved, or made you millions, that might be different, but as a rule, I would not reward financially.

That said, every idea implemented should be rewarded in the sense that the employee concerned should be recognized and publicized internally for their contribution – and token gifts can be appropriate in that context.
Of course, such positive behaviour should also be recognized in terms of appraisals, salary reviews and, naturally, employees who consistently contribute most in this regard would – all other things being equal – jump up the list for promotion, if that’s on their agenda.

I’ll leave you with a final point.

It is unlikely that any one employee idea will produce huge results – except in extremely rare situations. But, research and indeed my own experience, shows that it is the collective impact of the many small savings, or revenue boosts gained from the ideas generated that makes the process well worth the effort.

Enjoy your day!

“Hah, actually now that you mention it, a machine would be far preferable than having to listen to the nonsense coming out of your mouth. And who are you calling a bean-counter anyway?”

Ohh, this is starting to get interesting now.

“I called you a bean-counter, because that’s precisely what you are. All you guys care about is numbers; sitting in your little dark room counting money. You couldn’t give a damn about people – no wonder the world is in the state it’s in.”

Ho-Ho, this is definitely warming up.

“Look, I wouldn’t waste my breath trying to explain to you precisely how many things are wrong with what you just said, clearly nothing is going to change your ‘superannuated’ views. By the way, the world is in the state it’s in precisely because we left the running of businesses up to people like you…and should you need me to explain superannuated, do let me know…”

Not a bad put-down. Not bad at all. Especially, coming from an accountant.

“Listen, I know very well what superannuated means…but it still doesn’t change the fact that you guys haven’t a clue what it’s like to manage anything other than numbers…”

Actually, I didn’t get what superannuated meant in that context until I looked it up later – it didn’t really fit there and I guess, in some sort of acccountanty-humourous way, he meant ‘outdated views’.

And so it went.
It was highly entertaining listening to the two lads tearing strips off each other.
This exchange took place at a dinner I attended last evening – a networking event. Not too much networking happening at our table I have to say, although the unscheduled entertainment was worth the price of the meal all the same.
It had all started off gently enough, just a bit of ribbing amongst the two lads – nothing unusual there between a manager and an accountant.
But as the dinner progressed, the jibes got more and more pointed. Maybe it was the wine, but I think it was just a case of two people taking a disliking to each other.

Anyway, the incident got me thinking.
About accounting.
Well, it was more than that to be honest, it got me thinking about measuring business performance in general.

Bean counters get a hard time.
I have certainly had plenty of arguments with them over the years, particularly when I was working in operations.
On occasion, in my view, they deserve the hard time because some of them – and I do stress it’s only some – do only see numbers and little else.
But, it’s important to be fair too, and that’s probably an outdated view because most of the accountants I know these days have a much broader view of business life. In fact, in many ways, they can now be more akin to internal business consultants.

Anyway, I don’t know where the ‘bean-counting’ terminology came from, but whatever about the ‘bean’ part, I’m okay with the ‘counting’ bit.
Counting is good.
Without counting, we would never know what’s on track and what’s not.
The problem I have is what’s often being counted.

Sometimes, even today, the focus of the counting is too narrow.
Let me give you a very simple example of what I mean.
In most businesses I know of, managers at all levels have accountability for some element of a budget – the higher up the ranks the greater that responsibility.
And I’m all for that.
What I think is wrong is that, frequently, the scope of that accountability is too narrowly focused. Hit the numbers and that’s all that matters.
But, managers are responsible for more than just revenues and costs – such as for employee and customer satisfaction to name but two dimensions – and this should be reflected in what they are measured against.
Often, managers are not held accountable for such things.

And I don’t limit that failing to operational managers.
The same principle applies across all business functions.
For example, sometimes marketing people – let’s say in relation to social media –get very hung up on ‘number of followers’,  or ‘likes’ and so on, when what really matters is what additional business accrues or doesn’t from those online relationships.
They are often measuring the wrong things.

Okay, businesses have gotten much better at measuring performance in the past decade or more and many companies now use tools like the Balanced Scorecard or the EFQM model which help to define broader measures of performance.
Still, and this particularly applies to SME’s, the range and scope of performance measurement can be too limited in my opinion.

For sure, you don’t need me to tell you just how important the measurement of business performance is and no matter what your current role, it is always worthwhile to stand back and consider how well that function is happening in your business at present, or even your department if that is most relevant.
As you do so, here are some points to consider.

Clearly, the intent of any approach to business measurement is to achieve two general aims. One, it should provide feedback on actual performance in relation to a particular target or goal, and second, the data generated should facilitate decision-making which then enables improvement or correction where required.

In looking at your current approach, think about the following five questions:

Do you have the right information to support decision-making?
From experience, I find a number of common concerns here:

•  Many business still are too focused on financial measures, or  as I said, even when the measures are broader, they concentrate on the wrong things like the ‘number of enquiries’ as opposed to ‘sales generated per enquiry’.
• Equally, there can be a tendency to stick with ‘hard’ measures like revenues and costs, number of accidents etc, but avoid the measurement of more difficult issues such as customer and employee attitudes.
• Also, the outputs from certain functions such as IT, Marketing, or Training can be hard to measure and often it’s a matter of ‘hope for the best’ when it comes to spending in these areas.

Some time back, when I was working on a forthcoming book, I was speaking to a business owner about this very point – having the right information to hand. I captured his views as part of that book and I think what he had to say is quite useful here:

“We have identified global performance measures for the company overall, as well as those for our individual key processes. These include:
Management Measures – financial targets, and other non-financial measures, for example, in relation to quality, environmental management, hygiene & safety;
Customer Measures – targets in relation to customer satisfaction, loyalty, retention, market share etc; and
Employee Measures – goals in relation to employee engagement, turnover, productivity

“With this dashboard of measures to monitor our performance, we now have a much broader, and I would say more useful, analysis of how the company is really doing. We always stay on top of those measures too and any signs of slippage are met with a clear investigation of cause-and-effect and appropriate action is taken to bring us back on track.”

I think he hit the nail on the head on this question and you should consider whether your current approach gives you a real 360-degree view of how your business, or department is performing.

Do you have the right systems in place to provide the information you need?
Most businesses today have very strong financial information systems in place, but you might need to consider how effective your current approaches are in non-financial areas such as gathering customer or employee feedback? My experience is that these areas can be weaknesses.

For example, a lot of companies rely on comment cards to measure customer feedback, but at best this hits only a very small % of overall customers and the information attained is limited. Yet you hear managers all the time saying things like we have 90% satisfaction rating from our customers – sure, maybe they do, but only based perhaps on 5-10% of their total consumer base and with regard to three or four aspects of the customer experience.

Do the right people get the right information relevant to their roles?
It is always important not to mistake quantity for quality in terms of the range and scope of measures you provide for people. The ‘blanket’ approach where everyone gets the same data can actually be counterproductive in my experience. Information overload in other words.
Give the right people the right information.

A related issue is of concern here and this is a problem I have seen many times and often goes under the radar for a variety of reasons, not least of which is potential embarassment for the people concerned.

Often, and particularly so in relation to more junior managers, they don’t really understand the data they are presented with and as a result its use, in terms of supporting decision-making, is diminished. Such individuals often don’t speak up, because they don’t want to appear ‘stupid’ in front of theirmore senior colleagues.
And, this issue is not just limited to junior ranks: for example, several CEOs in the major finance houses which failed in recent years have admitted that they didn’t really understand the derivatives and other products they were selling, so a lot of the performance data they received meant little to them.

Do they get that information at the right time?
At what intervals do you currently take snapshot measurements and is that appropriate in a rapidly changing operating environment?
Obviously for financial and market data you need to track your metrics constantly, but for customer or employee satisfaction the intervals might be monthly, quarterly, half-yearly or annually. Is what you currently do as regard these non-financial areas sufficient? For example, lots of businesses I know only measure employee satisfaction once a year. I don’t think thats enough.
For any data to be of use in terms of decision-making, it has to be timely and this can be a challenge if yours is a small business.

A second consideration here is the differentiation between measures which track implementation and those which focus on impact. If actions agreed are not happening then you won’t see the desired impact at a later stage, so you always want ongoing evidence that ‘execution’ is actually taking place effectively.

Are the right decisions being made with the information you have?
This has all to do with the effectiveness of decision-making that arises from the data at hand.
Key considerations here include who is involved in analysing the data and how good are they at it? It is important to ensure that you have a core team of leaders – be that business-wide or at department level – with appropriate expertise across relevant business dimensions, who collectively review performance and make decisions accordingly.
This analysis phase requires you to investigate root causes to ensure you are identifying the right issues and not just focusing on symptoms of more fundamental problems.
Another consideration here is how you currently compare your results externally to determine how they measure up to industry norms and more importantly best in class organisations?

The answers you come up with to these five questions should provide you with some food for thought in relation to how you currently measure performance.

A bit of a serious post today, I know, but it’s hard to be lighthearted about counting, but it’s a critical consideration nonetheless.

And it’s what you count that matters most.

Enjoy your day!

I think it was the ‘Please press zero to speak with one of our support agents command which initially got him stirring.
Maybe, the fact that pressing the said zero simply took us to another menu where the whole rigmarole began all over again, had hastened his return.
The 10 minutes left waiting once the ‘talk-to-an-actual-real-live-person-button’ was finally found, certainly didn’t help either.
But things really started to go downhill, once the actual-real-live-person turned out to be even less helpful and far more annoying than the machine.
At least the machine didn’t have a ‘condescending jerk’ option, so in that sense it was infinitely preferable.
Nor did the machine keep offering the same solution over and over again, despite being told several times that it hadn’t worked.
And the machine, for all its annoyances, definitely never spoke to us like we were a four-year old.
Although, in the end, it was likely the ‘it would be preferable if you had read the manual before calling support, Sir’ comment which finally stirred Crazy Paddy back into action.

Now, as someone with a background in the service industry, it takes a lot – and I do mean a helluva lot – to bring out the Crazy Paddy in me, and when it happens, it is usually more than well deserved.
And, believe me, it was on this occasion.
Thankfully, if that’s the correct word to use, I am not alone in losing my cool, because according to the American Express 2011 Global Customer Service Barometer, a large proportion have done so.

Actually, I urge all readers to have a look at the American Express report, it makes interesting reading for anyone in a service environment. You can find it here.

Anyway, now that Crazy Paddy is well and truly back in his box, let me quickly explain what happened.
Yesterday morning, I spent several minutes interacting with a machine; patiently following the instructions of the robotic-like voice, essentially going round in circles trying to make contact with a human being.
You see, the previous day I had changed Broadband service provider, lured not by price, but by all the great promises about extra speed, add-on features and I was particularly attracted by the free 24/7 service support on offer.
I have had terrible problems in recent months with email and internet access, so I was happy to change, and pay extra – up front – to rid myself of those problems.
Unfortunately, reality fell far below expectations.

I was up until 2am the night before last trying to get the new broadband service working. Without success.
The ‘simple’ set-up instructions were far from it, even for someone who is fairly au-fait with all this stuff.
And, apparently 24/7 actually means 9am to 9pm; outside of those hours, you can email tech support, which is slightly problematic when you can’t get online in the first place because their damn product refuses to work.
Plus, the ‘helpful, knowledgeable and attentive’ technical support agents promised, actually turned out to mean being confronted at 9.30am yesteray morning by a patronizing fool who began every second sentence with ‘As I said, sir…’.

Anyway, like most things, there was a bit of learning to be had from the incident, that being how there are significant challenges for managers in all service businesses, in terms of aligning what I call the Service Triangle:

In the case of my new ‘service’ provider, there was clearly a distinct mis-match between the three components of the triangle: you might even say that, in their case, it was a sort of Bermuda triangle because promises made seemed to mysteriously disappear into thin air once my signature had dried on the dotted line.
Now, as a business person, I get the need to keep costs in line, but I also know that treating customers with such contempt once they have handed over their cash, is never a good idea.
Promises need to be delivered upon, or don’t make them in the first place.
Sure, my problem was eventually resolved, but I tend to find that if the word ‘eventually’ features anywhere in a consumer’s description of a service experience, then that provider is pretty much on a slippery slope.

And, again from my experience, this particular company is far from alone in mis-aligning the three sides of the triangle. So, it is always worth taking a fresh look at it and, as you do so in relation to your own business, you should consider the following points, which are relevant regardless of the nature of your business, or indeed your level within it:

Try to align the three dimensions as closely as possible
Obviously, it’s never easy to get that balance right, but not doing so only leads to customer dis-satisfaction, and at best short-term gain for the business.
Now, I am not a major fan of companies like Ryanair but at least they do balance the three dimensions.
Their marketing makes no false promises, in fact you could argue that they set out to lower consumers’ expectations – it’s low fares, little else – and what actually happens on the ground, like it or not, simply reflects that. Consumers know what to expect and thats what they get.

Think about how well you align the service triangle in your business at present. As part of that, I often find in companies that marketing (sell) and management (save) personnel are working from different goal horizons, so it is usually worthwhile to sit down and make sure that any promises made, match what’s possible.

Try to increase choice, not reduce it
In seeking to better align the triangle, it is important to also try to increase customer choice and not reduce it. After all, not all businesses can ‘promise little and deliver little’ like the low-cost airline model, and for most businesses, choice is not a ‘nice-to-have’ but a necessity.
That said, many companies today attempt to limit choice if they can get away with it.
And this is a particular area where the conflict between marketing and operations can arise. Markeeters love choice, whereas Operators like to, or are often forced to, limit it because too much variety is seen as too difficult, or costly, to manage.
Difficult but not impossible, though, and customers like choice and, research shows, are prepared to pay a premium for it when those choices are attractive, and delivered to a high standard.

Try to really understand your customers
Sure, every business today says it understands its customers, but I’m not so sure.
Maybe you do, and well done for that, but really think about how you feel you know those expectations.
How often do you conduct focus groups?
How good are you at analysing and responding to customer feedback?
How effective are those feedback systems – do they produce the quantity and quality of information you need?
What do you offer your customers that repsonds to their specific needs – by segment – in a way that your competitors do not?

Here’s an example of what I mean about really understanding customer needs.
As I write this, I have just received an email from my new service provider, asking me to give them feedback on my ‘support experience’.
Two things come to mind here.
First off, if the support agent had been any good yesterday morning, apart from not rousing Crazy Paddy, he would have offered a better experience in the first place and then asked me at the end of the call how the experience was, and what could be done to improve it.
The second point is why would I bother wasting even two minutes more of my time to fill in a feedback form for them after that lousy experience.
The whole thing is just a cosmetic exercise in terms of ‘caring about your experience’ as far as I’m concerned.
If they really cared, and wanted to know how I felt, then they could always call me: for sure, they took every damn piece of contact information off me when I signed up, so it’s not like they don’t know how to reach me.

Try to think investment not costs
This links from what I just said above.
Automated telephone systems and email feedback forms help to reduce costs. I get that.
But, in my experience, they mostly serve to wind people up, so what’s the hidden fallout from those savings?
Maybe a bit of investment in people-centric services would produce not only ‘goodwill’ – which doesn’t pay the rent, I know – but could also create future sales opportunities.
For example, despite having clicked ‘no’ when I signed up to the ‘did I want to be kept informed of future offers’ question, as part of the feedback email just received, there are  details of the ’great deals’ available from my new sevrice provider.
Clearly, I won’t be spending any more money with them than I have already done after yesterday’s experience.
I wonder how many such potential sales are lost whilst costs are saved.

Try to think empowerment, not standardization
Recent decades have seen many service businesses identify key ‘touch points’ or ‘moments of truth’ – essentially the priority interactions with customers – and then standardize responses to them.
Whilst I totally see the objective behind this – consistency in delivery – I am a big fan of giving employees (and I mean the right employees, in terms of their attitudes and skills) general guidelines of how to respond in various scenarios, and then empowering them to use their initiative in how they react.
Sure, many factors need to be considered for that to work, everything from recruitment to training, but the more ‘personal’ the service feels to consumers, the more likely it is to exceed expectations and therefore balance those two sides of the triangle.
My ‘support’ agent will likely say he followed the script – the standard – but his attitude was completely unacceptable so the experience was lousy.
Standards, to my mind, often cloud what really matters – attitude. It’s not what you do but how you do it.

I could on go on with considerations here, but you get the point.
The service traingle is a very useful conceptual tool for managers – at any level – to consider the  often opposing forces associated with managing the service experience.
And I say ‘at any level’ because, although senior managers must concern themselves with the macro concerns in this regard, those managers further down the chain must also consider the alignment of the service triangle on a daily basis.
Here’s a simple example of what I mean.

I was recently having dinner in a hotel restaurant, and on the table was a nicely produced tent-card promoting a special wine of the month: in full and half-bottles. The marketing department doing their bit to up wine sales.
It worked, and they got my attention, so I decided to order a half-bottle.
When the waitress came over, I asked her a little bit about the wine, had she tried it and so on.
Blank stare.
It seemed to me that she wasn’t even aware of the promotion.
Lack of alignment in the triangle.

What’s worse, she seemed to care less about it either.

Just the kind of thing that gets Crazy Paddy going.

Enjoy your day!

“Ha-Ha, very funny,” I replied.

“We hug trees and, oh yes, we recycle paper,” he added, which got a big laugh from those around the table.

They were all finding this hilarious indeed.
Nothing, it seems, brightens up the day more, for some people at least, than winding up the consultant.
Glad to be of service, I suppose.

I was discussing the issue of Corporate Social Responsibility (CSR) with this particular business owner and his senior team and that’s how he kicked off his answer…he’s a funny guy.
Well, he’s the client, so he is always a funny guy.
If you get my drift.
Anyway, despite his constant button pushing, we actually get on very well and he usually has some valuable insights on various apsects of business life, even if I often have to wade through a fair helping of sarcasm to find them.

During the discussions, once we got past the joking stage I mean, we touched on more serious matters in relation to CSR.

Like most companies these days, he has some initiatives in place which fall under the broad umbrella of CSR – mainly, in this case, related to energy and waste management. Fairly standard stuff really.
Truth be known, he does them more because he has to – recent legislation gives him little choice on the matter – rather than for any great zeal for CSR. His own words on the subject are, I think, worth conisdering. And obviously I’m paraphrasing here:

“Look, we do our bit to ‘save the planet’ (a big mocking grin appears on his face as those words are spoken), but apart from the feel-good factor for some of the team, I find it very hard to figure out whether all this CSR stuff actually pays-off in terms of the bottom line. Sure, we saved a fair bit on our energy and waste bills since we made the changes, but those savings were only really seen in the first year or two; now, they have pretty much levelled off…maybe we’re a bit CSR-lite compared to others, and I’d be open to doing more, but is it really worth all the hassle?”

I think he makes a lot of sense, to be fair.
And he is far from alone on that score: I hear similar opinions expressed on the matter by managers in both large and small businesses alike.
Worse still, I see some companies using CSR more as a PR tool than a true strategic business driver, but that’s a story for another day…actually, whilst were on that particular subject, please reflect on these words for a moment.

“Our mission is to build unrivalled partnerships with and value for our clients, through the knowledge, creativity, and dedication of our people, leading to superior results for our shareholders.”

Sounds lovely doesn’t it? A nice CSR-ish feel to those words, isn’t there?
Bet you’d love to work for, or be a client of, a company like that, eh?
Who is it, you ask..?
Lehman Brothers.
Yes, the reality didn’t come anywhere close to the promises Lehman made and it’s no wonder that people are sceptical about CSR.

To be honest I was sceptical about it too for a long time. So, probably, were you. Maybe you still are.
What changed me was that, through experience, I have seen – when companies really do buy into CSR, that is -how it can make a big difference in performance.
Today’s post will try to give you some guidance on how to maximize those benefits in your business.

First off, lets’ start with a quick snapshot of what we mean by CSR because, again from my experience, despite all the waffle around, there is a fair degree of uncertainty as to what CSR actually entails.
I recently came across this diagram by Mallen Baker, a writer, speaker and strategic advisor on corporate social responsibility which, for me at least, brings all the strands of CSR together into a simple model:

I think this diagram summarizes very well the mutlitude of potential activities within CSR, from ethical dealings with consumers, to fair treatment of employees, to positive interaction with the local community and so on.
Clearly, the range of things that can be done to build CSR within any business, large and small, is extensive; of course, what can and should be done will also vary dramatically from business to business.

But why bother with CSR in the first place?

As I said, I was somewhat sceptical about the benefits of CSR, but I have also seen clear results over the years in the businesses that I have worked with which have won me over. These included a mix of:

• Lower costs and greater efficiencies
• Increased goodwill, customer loyalty and ultimately sales growth
• Improved employee retention, engagement and raised productivity
• Reduced reputational risk, or legal challenges resulting from bad or unethical business practices
• Improved access to capital and finance through CSR focused investors or funds

These things really happened as a result of effective CSR. But, you are probably looking for results in a wider context other than my own unverified experience.

For sure, measuring the impact of CSR on the bottom line, for a variety of reasons, is extremely hard, and there are conflicting opinions as to the level of impact. Still, there is plenty of concrete evidence out there which indicates that strong CSR focus makes a real difference. For example:

• Marks & Spencer claims that its Plan A eco programme made it an extra £50m in 2010.
• A US study of 3,000 grocery shoppers, showed that broad initiatives like environmental friendliness and community support build only goodwill, but initiatives like offering locally sourced products and fair employee compensation –actions related directly to the products and people that consumers face — bring both goodwill and a higher share of wallet from consumers.
• An 11 year Harvard University study found that stakeholder-balanced (CSR orientated) companies showed four times the growth rate and eight times the employment growth rate compared with shareholder-only focused companies.

Yes, it may well be difficult to prove without doubt the precise impact of CSR on profitability, because not every company does the same thing so its hard to compare like with like, but there are clearly strong correlations there between CSR and improved business performance.
Without a doubt, CSR deserves attention, even – if not more so - in these difficult times.

How to get the most from CSR in your business
As with any aspect of business, what you get from CSR will depend upon what you put into it. And what you put into it will be influenced by many factors such as the size, type and location of your business.  A simple conceptual framework for applying CSR in any business entails:

Commitment
For me, before anything else, CSR is all about a mindset – if the leader(s) in any business, of any size truly believe in it, then there is no shortage of practical things that can be done, which are good from a CSR point of view but also make sound business sense. The better that commitment, the greater the results seen. Think about:

• How committed to the concept of CSR are you at present?
• How is that commitment shown and communicated?
• Are you leading or following in terms of CSR?
• Who’s driving CSR within your business?

CSR Assessment
A full CSR audit should frequently be carried out to help define ’where you are now?’ in relation to CSR.  As part of this, you should consult key stakeholders to determine their expectations.
For me, this is a really useful activity, particularly when it relates to consumers, because you can begin to determine how interested they are in CSR related issues, what their expectations of you in that regard are and even whether they are willing to pay a premium in terms of products and services you offer.

• Do you know what your customers expect of you in terms of CSR, beyond the generic conerns?
• Are you delivering on those expectations?
• Apart from customer-focused initiatives, what other aspects of CSR are you working on in the business?
• What more could you do across the spectrum of CSR?

SCR Policies
Okay, policy-smolicy you are likely thinking – and, for sure, policies are often not worth the paper they are written on.
And I agree with that, to the extent that many businesses have the policy but little else. Think Lehman here, or most banks, over the last decade if in any doubt.
Still, I think a general CSR policy, simple, conherent, and fully communicated, is helpful because, for one, it lets people know what your CSR intentions are and, two, that puts pressure on you to deliver once you go public with those intentions.

• What have you publicly committed to in terms of CSR at present?
• How broad are those commitments? Are you doing a little or a lot?
• Do you deliver what you have promised?
• If not, why not?

CSR Strategy and Plans
Of course, to bring the CSR policy to life, clear strategies and related plans are needed.

• A simple exercise here: in your own mind, list five concrete actions being consistently applied within your company this year that show there is a vibrant and meaningful CSR strategy in place.

Implementation & Impact
As with any strategy or plan, what really matters in the end is how well it is excuted. Another simple exercise:

• For one of the five actions you identified a moment ago, how well is that particular activity executed?
• What is the expected impact of that activity in terms of something measurable i.e., reduced cost, lower risk, or increased sales etc?
• What has it actually delivered?
• Is there a negative gap? Why?

These are simple questions to consider in relation to your current approach to CSR but as I always say they are simple but not simplistic.

In my experience, and I don’t mean this in any critical way, there are likely to be large gaps between your best intentions with regard to CSR and the reality of action on the ground.

For further evidence of the benefits that CSR can bring, even for small businesses, have a look at what The Venus Company – a Beach café operator and beach goods retailer in the UK - has achieved.

Finally, I believe that when CSR is approached in a meaningful and consistent way within the business, it can make a positive difference in terms of performance even if, at times, it is hard to fully quantify what the bottom line impact of those benefits are.

Or, as I said to my client, when it comes to trees, “it’s good to hug”…

Enjoy your day!

Each of you blames the other for the botched attempt.

You are taken to the police station and held in separate rooms. You know that the police don’t have enough evidence to convict you as yet, because you weren’t actually caught red-handed, but you also know that there is no way in hell you want to go to prison – not even for a day.
You are far too good looking for that

After a while, a detective enters the room and makes the following proposition:

“You have two choices,” he begins “you can choose to confess or keep stum. If you ‘fess-up’ and that idiot friend of yours next door stays quiet, then I will drop all charges against you, and he will do some serious time.
“And the opposite applies too: if he confesses and you stay silent, then he will walk and you’ll do the time.”

He pauses for a moment to let that option sink in. Then he continues.

“If both of you confess, then you’ll both do time, but I’ll make sure that you get a reduced sentence, say, 6 months each.”

He eyeballs you as he speaks those words. He then gives you another option.

“If you both refuse to talk, then I will only be able to convict the pair of you for acting suspiciously near the scene of a crime, which would probably mean a one month sentence each.”

He tells you he has made the same offer to your accomplice. Then he leaves you to stew for a while.

Which option would you choose?

You may be familiar with that particular scenario.
It’s known as the Prisoner’s Dilemma.
There are many versions of it floating around and it is often used to highlight, amongst other things, the tensions between self-interest and the greater good.
You will have figured out that in the ideal world, by both keeping quiet, you each get a token sentence.
In other words, by cooperating, you can get the best result for BOTH parties.
But, in the real world, and seeing as you blame your accomplice for the failed robbery in the first place, plus the fact that you fear going to prison, you are most likely to try and ‘out-smart’ him or her; in doing so, the safest option is therefore to ‘confess’.
But, highly likely, he or she will also figure that out, so the probable outcome is that you’ll both confess and end up doing 6 months – more time than you would have done, had you cooperated.

That’s a very short, and probably superficial, synopsis of the Prisoner’s Dilemma, but it does help to flag some issues about cooperative versus competitive strategies.

Here’s another practical example.

For over fifteen years, when running teambuilding programs, I used one exercise called ‘Win as much as you can’.
Very simply, it involved dividing the group into four teams and putting them in different parts of the room.
They weren’t allowed talk to the other teams, but they did have a score sheet in front of them which showed how they could win points.
There were ten rounds in the game and the only thing each team had to do was to agree to pick either X or Y for each round.
The objective of the game was to win the most points and to make it interesting, I used to offer a prize of €50 euro (pounds before the euro existed) to the team with the highest score. The money added to the competitive dynamic.

And how could they win points?
For each round, I gave the teams 2 minutes to quietly pick X or Y and write it down on the sheet provided.
Then, before moving to the next round, each team would shout out whether they had picked X or Y. Depending upon the mix of Xs and Ys selected between the four teams, points were awarded as follows:

Obviously, the safest option was always to pick ‘X’, as your team only lost if all other teams picked X as well.
And, you know, in all the time I used the game, with groups from all walks of life, countries etc., none ever won that money off me. Not one.
It always amazed me.
Had all four teams agreed to pick Y for each round, then – apart from a boring game – they would each have won a point per round and there would be no loser. The money could have been shared.

But, no, – that never happened – ever. The urge to ‘win’ always took over and they were driven by the desire to beat the others.
In round 5 (the only round where they were allowed to confer with the other teams), they would often collectively ‘agree’ to pick Y, so that each team would win a point – but invariably one team would lie and all hell would then break loose.
Human nature is a wonderful thing.
(By the way, if you want more details on the XY game for use with your team, drop me an email and I will gladly send it on to you.)

The game did, however, teach me a great lesson, that being how competition is not always the best strategy; in fact, it can often be self defeating.

Now, let’s get a couple of things straight for starters.
I am all for competition – thrive on it, in fact – but only when it’s what I call ‘smart’ competition.
And despite the widely held view that competition is ALWAYS good, and that winning is everything, there are plenty of downsides to ‘dumb’ competition.

Think of it from two angles, if you will:

What dumb competition can do to us as individuals: we always hear, and in fact I have said it many times myself, that ‘competition brings out the best in us’. It does, but again only when the smart tag is attached to it.
By that I mean, when competition is for competition’s sake alone, it can actually bring out the worst in us, especially if we develop a ‘win at all costs’ mentality.
It’s not an exaggeration to say that some people turn into downright jerks when the competitive streak takes over.

What dumb competition can do to organizations: now, as I alluded to a moment ago, when there is no competition that’s never a good situation, so I would not promote that view.
Still, organizations too can suffer from the effects of dumb competition and this can have serious negative consequences; particularly when ‘winning’ becomes more important than ‘excelling’, or when the rules become irrelevant in the face of the desire to outperform competitiors, or the market as a whole.
We only have to look at the carnage that has resulted from the fact that testosterone clouded thinking for almost a decade.

So, to me, competition is good when smart: and it’s smart when it leads to long-term added value, makes us – as individuals, organizations and customers – feel better not worse and when it delivers outcomes other than we ‘beat’ someone, or something else.

Still, even with those qualifiers attached, I believe that there are times when cooperating is actually the better option over competing. And, yes, even in the cut-throat world of business.
In these tough times, I think that all business owners and managers should look more closely at where they might cooperate to compete.

Coopetition
In their highly respected book, Cooperate to Compete, three of the world’s foremost authorities on global competitiveness – Kenneth Preiss, Steven L. Goldman and Roger N. Nagel – promote the idea that we should consider our businesses as “interprises”.
I like that concept. A lot.
As a result, they argue, we should seek to form closer, more interactive relationships with customers, suppliers, and especially competitors.

Now, I don’t pretend that this idea of ‘Coopetition’ – as Ray Noorda, the
founder of Novell coined the term – is a new one, but I think that the potential advantages of combining both competition and cooperation strategies will be an even more important driver of growth in the years ahead.

Sure, it’s happening already in many sectors, for example:

Hospitality; as a simple example, look at food courts where all the restaurants are located together in one space sharing equipment, hygiene and cleaning services, etc. The approach brings the consumer to the one location(cooperation) but allows them to decide between the various options available (competition).

Retailing:look at how Amazon works closely with other retailers and producers such as Toys R Us, Target, and Office Depot to name but a few. Amazon provides sales platforms and distrubution networks for a fee, whereas the participating companies gain exposure to Amazon’s massive customer base.

Car Industry: for instance, take the arrangement between PSA Peugeot and Toyota to share components for some models; in fact there are lots of similar examples across the motor industry.

Software: even Microsoft and Apple, once sworn enemies, are now beginning to build closer ties on software development.

So Coopetition is hardly new, but I think we have only scratched the surface on it as yet. By the way, you should also think internally here – particularly if you are in a large organization, because there are often internal divisions and dumb competition going on between departments which can affect business performance.

In a very simple way, I saw Coopetition in action when I was on holidays last year.
On the island of Paros in Greece, as is the case in most seaside resorts there is a long strip where everyone congregates, particularly in the evenings.
Most of the foot fall comes from one end, then proceeds down the strip, does an about turn and comes back again.
As you enter the strip, there is a guy selling hot snacks such as small Kebabs and the like. If you buy one off him, he gives you a little ticket which you can use to get a discount for an ice-cream off his mate down at the far end of the strip.
And, if you buy an ice-cream off him, he then gives you another ticket with which you can get a cheaper coffee off the first dude when you get back to the top of the strip…

Okay, pretty minor in the greater scheme of things, but what it does show is that there is always scope for a bit of Coopetition, regardless of context.

You should really think about where you might increase the potential for Coopetition in your business over the months and years ahead, through:

Sharing skills and expertise – when you come together with a competitor, you create a mix of skills and expertise which makes the whole stronger than the individual parts; all you need to do then is to define ways in which you can use that extra strength for mutual benefit.

Reducing Costs – as an example, by their vary nature, many competitors in the same field use similar raw materials and inputs; it’s what they do to turn them into outputs that differentiates the companies. But there is always scope for joining forces to bulk purchase, or negotiate better terms from suppliers.

Joint Marketing – of course there are always rivalries between competitors in terms of gaining the bigger slice of the pie. That said, it is in both parties’ interests if they can market together in a way that makes the pie bigger. That’s good for everyone.

Pooling backroom functions – activites such as administration, for example, are undoubtedly important but rarely do they give a firm any competitive advantage. So there is nothing to stop, even two direct competitors, from pooling those functions; in fact, as they are likely to be similar processes in each business they lend themselves to being pooled in order to reduce costs.

I could go on, but you likely get the point: the scope for Coopetition is broad and deep.
Sometimes we are, often unintentionally, blind to those opportunities because we get hung up on the idea of competing, or as the title of today’s article – a quote from that legendary coach Vince Lombardi – suggests, we get trapped in the mindset that winning is all that matters.

Sure, it does mean everything, but then again, that depends upon how you define ‘winning’.

Enjoy your day!

No?

Absolutely sure about that, are you?

Seriously, think about it.

If a recognized authority figure told you to push a button which you knew would deliver a mild electric shock to another person every time they made a mistake, would you?

Okay, you might do that.
I know I probably would, especially, if I knew it was only a mild shock and if I felt they deserved it.
Actually, the more I think about it, there are a few people I have met over the years who I would gladly do that to.
Where can I sign up?

But, if that same authority figure told you to push a different button which they said would severely shock – and perhaps even kill – the person, would you do it then?
Absolutely not, you say?
Me neither.
No way in hell would I do something like that…although, hold on a sec…actually..
No, no, just kidding, I could never do anything like that.
Really.

In fact, all joking aside, no one would ever knowingly do something like that.
Would they?

In the 1960’s, a Professor Stanley Milgram from Yale University conducted a series of experiments – you may well have heard of them – which researched the effect of authority on obedience.

Essentially the background to the experiments was as follows:

Milgram and his team solicited local volunteers for what they said was an experiment on learning. When each of the selected volunteers arrived for their appointment, they were met by two people – a research scientist dressed in a white lab coat, and another ‘volunteer’ (who was actually one of Milgram’s team).
The researcher then proceeded to explain the study to the ‘two’ volunteers.

The real volunteer was told that they would be the ‘Teacher’ and the pretend volunteer would be the ‘Learner’.
The researcher then explained that they were exploring the effects of punishment on memory.
The task of the Learner was to learn a series of words and the Teacher’s role was to test the Learner’s memory of those words and administer electric shocks for each wrong answer.
And, they were told, for every new wrong answer, the voltage would increase.

The Teacher and Learner were then placed in adjacent rooms.
On the instrument panel in front of the Teacher was a device which had different buttons, each signifying shock levels from 15 to 450 volts, along with words such as “slight shock,” “moderate shock,” all the way up to “Danger: Severe Shock,” and, finally, an ominious “XXX”.
During the experiment, the Learner – who could be heard through the thin wall – was also told to grunt at 75 volts; complain at 120 volts; ask to be released at 150 volts; plead with increasing vigor; and let out agonized screams at 285 volts. Eventually, in desperation, the Learner was told to yell loudly and complain of heart pain.

So that, albeit very briefly, was the scenario. You get the picture anyway.
If you don’t know about these experiments, then you are probably wondering what the results were?

Well, let’s see.

Sixty-five percent (65%) – yes, that’s two-thirds – of the Teachers were willing to progress to the maximum voltage level, regardless of the distress they could hear in the next room. Prompted by the researcher, that proportion went all the way, even to the point where they believed they had potentially killed the person in the next room. Sure many were distraught about what they were doing, but they still did it. Kept following orders.

All very frightening really.

Milgram afterwards divided participants into three categories which I think is interesting:

Those who obeyed but justified themselves. Some obedient participants gave up responsibility for their actions and blamed the experimenter. Others had transferred the blame to the ‘stupid’ learner for their own suffering.
Those who obeyed but blamed themselves. Others felt badly about what they had done and were quite harsh on themselves.
Those who Rebelled. Finally, rebellious subjects questioned the authority of the experimenter and refused to go on.

As an aside, those three categories are interesting to me because you see them all the time in real life, and in organizations, particularly when dealing with, say, a crisis situation or a major mess up, when making tough choices or when bullying happens and so on.

People who will stand up and be counted are always in the minority…come to think of it, how many of those ‘rebellious’ types do you have around you?

Anyway, the conclusions from these experiments clearly had implications for explaining what happens during terrible events such as the Holocaust and so on.
But you are likely wondering what on earth this has to do with management?

Well, a lot really. And at a number of levels too.
I think there are some pretty obvious, but also more subtle, lessons to be drawn from these experiments.
A big factor in the outcomes seen was the general ‘environment’ created – the white coated respectable authority figure, the adjacent rooms which allowed for expressions of pain to be heard, the pressure to continue etc.
In light of this, I think it’s worth relfecting on how the work environment we create can – intentionally or otherwise – influence behaviors seen. And often not for the better.

Here are five examples of what I mean.

1. How we use or abuse power
This is perhaps a pretty obvious conclusion. At one level, the implications from the Milgram experiments are fairly obvious: leaders, as authority figures, can exercise that authority in a positive or negative way. That’s clear.

But, apart from their leadership style, what about the general environment that leaders create? Okay, the majority of managers I know don’t intentionally set out to create environments where people would knowingly harm others, but sometimes this is precisely what happens:

• I have seen countless examples where the boss has hassled his/her managers to such an extent that they then take out their frustrations or stress on others. Dog bites cat and so on.
• I have seen sales people under such pressure to hit targets that they have knowingly sold products or services to clients who did not actually need them.
• I have seen accountants put under the cosh to make the numbers look good to the extent that applying a bit of ‘creative accounting’ becomes an attractive proposition
• I have seen managers take a dislike to an individual, and I have then watched how others did the same to that person, for no apparent reason other than to stay in the boss’s good books.

I could go on, but you get the point.

Think about those type of concerns in relation to your business.

2. How we appear
This is a less obvious conclusion drawn from the experiments, so bear with me for a second whilst I make the link.

In Las Vegas a TV reporter once disguised himself as a security guard for a bank and positioned himself next to the ATM machine. He then pasted a sign on the cash point that said “OUT OF ORDER — GIVE DEPOSITS TO GUARD ON DUTY.” As customers came to use the ATM the ‘guard’ asked them if they were making a deposit or withdrawal. Unbelievably, nine customers out of 10 handed over account numbers, PIN codes and even cash to the guy.

This was not an isolated incident and many similar social experiments have shown the same patterns.
The message?
Sometimes, the appearance of authority is just as powerful as the authority itself.
And, as I said, in the Milgram experiments, the ‘man in the white coat’ and the fact it was ‘Yale University’ created an air of authority and respectability to the proceedings which directly influenced the behaviour seen.

Now, as managers, we always need to bear that principle in mind, in terms of how we project ourselves. Again, that’s fairly obvious.
But there is another implication here from a customer service perspective with regard to our employees.

Consider your front line staff who deal directly with your customers: how professional and authoritative do they appear in terms of how they look and act?
For example, I know that often when I feel the need to make a complaint I completely by-pass certain employees because they don’t ‘look’ to me as if they can address the issue.
Fair or otherwise, that’s a fact.
We all judge books by covers.

You should think about that issue in relation to your customer service team.

3. How we treat mistakes
This is another point that doesn’t immediately jump out at you from the findings of the experiments, but it does relate to the impact that the overall environment can have on behaviour seen.
Let me explain.

One Harvard professor – Amy Edmondson – studied surgical teams in hospitals and found that better-performing teams actually had a higher rate of reported errors than the lower-performing ones.
That seemed impossible.
Further research then showed that the reason for this was that the higher-performing teams had developed a greater bond and higher levels of trust and openness between them, so they were not afraid to admit their mistakes; in fact, they saw them as learning opportunities.
On the other hand, the lower performing teams were hiding their mistakes because they did not feel secure enough to own up to them.

If there is a lack of trust in the work environment, or if the culture is one of punishment, then that will lead to negative behaviour patterns of some sort.

Think about how mistakes are currently treated within your business and how this might be influencing behaviour?

4. How we reward people
The manner in which we reward our people, if not structured properly, can also have unintended consequences in terms of the behaviours seen.

For example, in the early 1990s, Sears Auto Centers in the US decided to pay commissions to mechanics based on the number of specific repairs – such as brake jobs – they performed in a given month.
It was an all-or-nothing deal – either the mechanics hit a certain number and they received the bonus, or they didn’t and got zilch.

What happened in that scenario?

Surprise, surprise, by the end of each month – under pressure to make target – nearly every customer who brought a car to Sears was told by their mechanic that they needed a brake job. Since most customers trust their mechanics, they mostly agreed to the work, and the guys reached their targets and received their bonuses.
Sears made millions of dollars from unnecessary repairs.
They later lost it all in fines, and damaged goodwill, when they were found out.

Badly structured reward systems can promote negative behaviour.

Here’s another example.
Sometimes – and this is particularly true in small businesses – I find that the reward systems can lack transparency; there is little or no consistency and the boss often negotiates different models for different people. This naturally creates suspicion around the place, which in turn influences behaviour.
This is another simple example of what can happen with badly structured reward systems. There are many more, such as how individually-focused rewards can damage teamwork.

Think about how reward systems are presently structured within your business, are they driving unwanted behaviour?

5. How we manage conflict
It never ceases to amaze me how some managers fail to see the blindingly obvious when it comes to conflict.
By that I mean, how mismanaged conflict can completely distort behaviour patterns.
This is something well understood, proven beyond debate, yet some managers either fail to grasp the point, or intentionally choose to ignore it.
When Destructive conflict – and I intentionally make that distinction here – is allowed to fester, it influcenes behaviour in all sorts of ways. Some get drawn into it, taking sides, or at least appearing to do so in order not to be isolated. Others withdraw and disengage.
All of this creates relationship gaps in the business and everyone is ultimately affected by the negative atmosphere.

Think about how destructive conflict is currently managed within your business?

Okay, it’s been a pretty long article today, so I will wrap up quickly.
What I have tried to do here is to higlight that there are many ways at work in which the ‘conditions’ we create as managers can influence behaviour – and it’s not just about the styles of leadership we adopt.
Many of the things we do, or don’t do, in terms of how we structure and manage various aspects of the business can negatively influence behaviour. It may be unintentional, but it still leads to damaging consequences.

You should reflect on such things in order to avoid any future shocks.

Enjoy your day!

I should probably explain what the heck I am banging on about.

Yesterday morning, I was walking down the street near where I live in Geneva and, out of the blue, this guy – a very well dressed sort too – stopped me and asked me if I spoke English.
As it turns out, this is about all I speak.
And my proficiency in it is probably questionable at best.

Anyway, he proceeded to tell me a hard luck story.
He had, he said, just arrived in the city.
From the airport, he had taken the train to the main station, then hopped on a the tram to that area of town, got off just up the street, turned his back for one second to check the local area map, and like a flash, all his bags and belongings had been stolen.
To be fair, a not too unusual occurrence in this city of late. Entirely believable.
This guy in question was ultra-polite too, very non-threatening and seemingly quite distraught at what had happened.
He seemed like the real deal.
And he needed money, of course.
But, it felt like a genuine need.
Now, I can usually spot a scam-artist a mile away, but I was going to give him the money he asked for -twenty francs, nothing too extortionate but not small change either – and was on the verge of reaching into my pocket…

But, for no reason that I could fathom anyway, the little voice inside my head told me not to.
It was something about the flicker in his eye when I started to reach for my pocket. And a sort of curling of the lip, or something that had raised the warning flag.
I was going to ignore inner voice, but he was persistent.
Don’t give this dude cash.
So, I didn’t.
I just gave my apologies and left.

But I really felt very bad about afterwards. All day long.
It was gnawing away at me.
What have I become, I kept asking myself, that I wouldn’t offer assistance to another human being in need?
Normally, I always help those less fortunate than me, or those in trouble, as much as I can so this incident really bothered me.
I felt bad.

Then, last evening, I was with some friends and began telling them about the incident: bemoaning the world we now live in where we are all so suspicious that we no longer help each other…how it’s a terrible reflection on society…blah blah…
Then one in the group stopped me. He’s a ‘man-about-town’ type you might say: always knows what’s going on. Plus, he works in the security industry, so he has his ear to the ground.
And apparently, it’s the latest scam in town.
Lots of people are falling for it too: obviously, the suit and politeness are working to good effect.
And it gets worse.
He told me that an elderly woman had even invited this guy – or similar – back to her apartment, where she said she had some money for him, and he could make whatever calls he needed to: he then proceeded to take every penny that she had at hand. Plus, all her jewellery. And anything else of value in her home.

The lowest of the low. I mean Pond-life.

Turns out, I had made the right decision, but it didn’t feel like something to pat-myself-on-the-back-for when I heard about the poor old woman.
And I shall be keeping my eyes peeled for that scumbag – if you’ll pardon my French – from now on.

Anyway, the incident got me thinking about how we all make decisions.

You probably already know that in the weeks and months immediately after the attacks on 9-11, air travel in the US fell by up to 20%, whereas road travel increased dramatically.
People, out of fear, and perhaps as a result of the mass hysteria that understandably took over at that time, made what they felt was a rational decision.
The best option – for those who avoided air travel – seemed to be that it was safer not to fly.
Turns out that wasn’t accurate. Not by a long shot.
For starters, travelling long distances by car is infinitely more dangerous than travelling the same distance by plane. All the stats confirm this.
What’s more, a Professor named Gerd Gigerenzer – a German expert on risk – later calculated that over 1,500 additional Americans died on US roads in the year after 9-11, than would normally be the case.
Turns out the ‘rational’ decision was incorrect.
Those who followed their ‘gut feeling’ and believed that flying was actually likely to be safer than before, due to heightened security, turned out to have made the better decision.

We all use gut feeling to support decision making, to a greater or lessor degree.
And we all know too that we should not over rely on it. Particularly in business life, depending solely on intuition can prove fatal.
That said, we all have examples of decisions we have taken in the past which were based on instinct alone and turned out to be great decisions, so is there any guide to help us to decide when gut feeling is good?

As I searched for answers to that question this morning, I came across an article published in the McKinsey Quarterly entitled “Strategic decisions: When can you trust your gut?” (see reference below). It was based on a dialogue between Nobel laureate Daniel Kahneman and psychologist Gary Klein.
The article made several interesting points which I think are worth sharing with you.

First off, the general thrust of the article is that we cannot prevent gut instinct from influencing our judgments, but what we need to do is to identify situations where it is likely to be biased, and then strengthen the decision-making process to reduce the resulting risk.
In other words, to protect decisions against bias, we first need to know when we can trust our gut feelings and be confident that they are drawing on appropriate experiences and emotions.

According to the article, there are four tests to assist in this:

1. The familiarity test: Have we frequently experienced identical or similar situations?

The article makes the case that familiarity is important because our subconscious works on pattern recognition.
If we have plenty of appropriate memories to scan, our judgment is likely to be sound.
They give an interesting example to back this point up.

General Matthew Broderick, an official at the US Department of Homeland Security, made a decision on August 29, 2005, to delay initiating the Federal response following Hurricane Katrina.
He did so, because he had previous experience of hurricanes and felt that it was worth waiting to see whether the levees had been breached and, as a result, how much danger people really faced in New Orleans.
He felt that, as he was familiar with hurricanes in the past, he knew what he was doing.
Unfortunately, his previous experience with hurricanes was in cities above sea level.
His delayed response, based on ‘gut’ proved disastrous because it did not result from analysing like-for-like experiences.

2. The feedback test: Did we get reliable feedback in past situations?

This is another interesting point to consider.
According to the article, previous experience is useful to us, only if we have actually learned the right lessons.
What they mean by this is that when we make a decision, our brains ‘tag’ it with a positive emotion — recording it as a good judgment.
But only subsequent feedback can verify whether it actually was or not.

The question is whether we get that feedback?
Why? Well, there are lots of reasons we may not.
Perhaps we change positions, or even jobs, before the outcomes of our decisions can be measured. We simply move on without knowing, or checking.
Or, it might result from the fact that, some leaders, may have people around them – intentionally or otherwise – who filter the information they receive, or protect them from bad news so they may not actually get the feedback they need.
As a result, we may continue to believe that a past decision was the correct one and, naturally, this feeds into future gut decisions we take.

3. The measured-emotions test: Are the emotions we have experienced in similar or related situations measured?

Again, I found this a point worth considering.
The emphasis of the article on this issue is that all memories come with emotional tags, but some are more highly charged than others.
They again use a simple example to highlight the key consideration here.
If a situation brings to mind highly charged emotions, they say, then these can unbalance our judgment.
For example, they make the case that knowing that dogs can bite is very different from having had a traumatic childhood experience with dogs.
The first will help you interact with dogs in a positive way: you know to always be a bit wary.
The second can make you afraid of even the friendliest dog: you are frozen by irrational fears.

In terms of decision-making, for example, if you have unfortunately lost significant amounts of money on property plays in recent years – as many have – then this will undoubtedly be a very highly charged emotional situation for you.
How is that likely to impact on your ‘gut’ decisions in relation to any future property investment opportunities that may arise?

4. The independence test: Are we likely to be influenced by any inappropriate personal interests or attachments?

The argument made here in the article is that when there is a personal connection to the outcomes of a decision, then this has implications for whether we can trust our gut instinct.
Again, a simple example is given to support the point.
If, for example, you were trying to decide between two office locations for your company, one of which was much more personally convenient, you should be cautious: your subconscious will have more positive emotional tags for the more convenient location than the alternative.
It is for this reason that it is standard practice to ask those with personal interests in a particular decision to refrain from voting.

Now, I don’t pretend that the points raised in this article are entirely new, but they are worth considering in terms of how to make the best use of gut-feeling in decision-making. The conclusion of the article is that, if a situation fails even one of these four tests, then we need to strengthen the decision process to reduce the risk of a bad outcome.

In other words, gut feeling is good…when it passes the four tests.

One thing is for sure, though, the decision making process will be very simple if I ever see that dude from yesterday again.

Enjoy your day!

Reference: Strategic decisions: When can you trust your gut? McKinsey Quarterly, March 2010.

I love that quote.
It deserves a moment or two of consideration, I think.
On the time issue, does any of this sound familiar to you?

• Having to work longer hours than required because you don’t/can’t sturcture your day
• Facing lots of unscheduled and inappropriate interruptions as part of your working day
• Feeling stressed and overworked because of the seemingly endless mountain of work in front of you
• Constantly feeling you are firefighting, or simply lurching from crisis to crisis
• Finding it extremely difficult to delegate
• Spending an inordinate amount of time clearing up other peoples’ problems
• Drowning in emails or paperwork

It does?
Then rest assured you are not alone.
Many people feel precisely the same.

If you haven’t already guessed it, today’s focus is on how we manage our time.

And I will begin with an admission.
By nature, I am the world’s worst time manager; not lazy by any means, just inherently lousy at managing my day. It caused me terrible problems when I first set up the business. I would often find myself sitting down at 8 or 9pm to write a proposal, having more or less ‘goofed off’ for the entire day.
Sure, if I had client meetings, or was actually working on a project, I would be great at managing the day, but without that structure I was hopeless.
Clearly that was unsustainable and over the years I have had to become much better at keeping on top of my time.
I’m still far from perfect, but I’m happy now with how I use my time. Mostly, I am anyway.
The moral here?
If I can get better at time management, then anyone can.

Now, before we go on, how much scope there is for you to better manage your time very much depends upon your individual circumstances of course; how good you are at it already will clearly be a factor.
What’s more, if you have a large degree of control over your day, then it should be possible for you to better manage your time, at least to some degree.
If you have less control, for example, maybe you are working in a customer-driven environment, or – worse still – maybe your boss is so lousy at managing their own time that they cause you to mis-manage yours, then the potential for improvement may be limited.

Whatever your daily reality, most of us don’t actually examine what the likely potential for improvement is – limited or otherwise.
We simply allow ourselves to be resigned to our fate.
Sadly I don’t have any magic answers for you here, but hopefully I have some useful food for thought on the issue.

There are many things you can consider to better manage your time, but for today, I will focus on steps I have taken in terms of ‘Planning & Saving’ my time.
I have also previously written about topics such as Delegation which can help here too. You should refer to that post as well, if interested.

Planning and Saving Time
Years ago, when I realised that I was in fact the ‘Anti-Time Manager’ I signed up for a course on the subject. One of the most useful things they covered was the Important/Urgent matrix. You have probably come across it before:

I found that quite useful in terms of thinking about where my time was spent and you should also reflect on your own situation as regards each of the four ‘windows’; and, more importantly, the proportion of your time consumed by each.
Anyway, I could bore you with all the theoretical advice they gave us on the programme about how to better balance the urgent-important dynamic, but a friend of mine recently told me a story over a pint which I think sums it all up very well:

He runs his own small business and must have the annual budget ready for his accountant in December each year, so they can finalize it for the bank and have it agreed and approved by January 1.
Every year he ends up working through the night at some point in December to get it done; and usually he drives the accountant crazy when he submits it, as it’s full of mistakes: “like your four-year old had done it, or worse still, like the dog had a go at the bugdgeting,” as the accountant once complained to him, such was his frustration.

Last year, he decided he would not repeat the same old mistakes.
So, he set two days aside in mid-November to do it.

On the morning of the first day, he sat down at his desk with all the necessary paperwork at hand.
I’ll just see what’s happening in the world, he thought.
So he surfed online for a while.
There was actually lots of very, very interesting things going on.
Okay, need a coffee, and then it’s definitely down to work.
Coffee on board, he next spent time formatting the spreadsheet.
“Made it look real professional too,” he told me as he sipped his pint.
Then lunch beckoned.
After all, the brain can’t function at peak-performance on an empty stomach, can it?
He headed down to the kitchen.
Still, he thought as he munched his sandwich, a lot of great work had been achieved in the morning. All the prep was done. He would fly through the numbers in the afternoon.

After lunch, he sat back down at the desk.
Maybe I should read up a bit on budgeting, so as not to have so many mistakes this year, he thought.
He logged back on and went searching on the topic.
Apparently, there was a lot about budgeting that he didn’t know. He was amazed.
Lots of very, very interesting things to read on the subject.
At around 3pm, the dog started barking downstairs.
Non-stop.
“The constant yapping was annoying my head,” he explained as he finished the pint.
Dog needed a walk apparently.
Ah, why not, he thought, don’t get many clear days like today at this time of year.
He packed up for the afternoon and went searching for the mutt’s lead.
Still, he felt as he drove towards the beach, a lot of great work had been achieved that day. All the prep was done, his understanding of budgeting was far better. He would fly through the numbers the next day…

Unfortunately, the following day, one of his employees called in sick; it was all hands on deck.

And when did he do the budget?
Yes, by pulling an all-nighter in December.
And what did the accountant say when he submitted his work?
He told my friend he felt that “whilst the dog was improving dramatically at spreadsheet design, there was a noticeable deterioration in his budgeting skills…”

We had a good laugh at the story, but knew exactly what the message was.
And we all mess up when it comes to balancing the urgent-important matrix, don’t we?
Still, I think that no amount of theorectical discussion around the issue will add any more impact than that story.

In terms of planning and saving time, I now do a few things that work for me and maybe they might help you too:

I Set Goals
At the beginning of every year, I define the really critical goals – personal and business – and identify the key activities required to achieve each of them.
Then, I put those key activities into some sort of sequence or logical order.
Next, I schedule them in as appropriate across the year.
And, at the start of each month, I look at which of those activities are urgent that month and I make sure I do them.

I Prioritize
Every week and every day, I spend a couple of minutes deciding which are the priority things to be done, and I do not finish my day until I do whatever I have decided was a priority.
Even, if I have to stay up late to do it, or miss something else I wanted to do, I make myself finish the priorites off daily and weekly.
I have found that by imposing that self discipline, I work much harder now not to put myself in that position.

I allow time for goofing – every day
I like to goof. And I miss not doing it.
So I always allow myself time each day – even if only a few minutes – to do something mindless. By actually scheduling my goofing time, when I am doing work of value, I don’t have the ‘inner voice’ nagging at me to take a few minutes out; either I know I have put time aside to do that later, or once I have goofed off, I have got it out of my system for the day.
Goofing is good.

I chopped my long finger off
I was a terrible procrastinator. I mean terrible.
Now I NEVER put something on the long finger; it kills me to do things on the spot, but I never procrastinate.

I switch my mobile off
Sounds like a minor point, but if I am working on something important, I switch off the phone for an hour or so.
I am not that important. People can wait for me to get back to them within a couple of hours or so.
Amazing what you get can done when it’s quiet.

I use a diary
I always had a diary.
In fact, after the course I attended, they gave me a nice leather-bound one. A real fancy looking thing.
I carried it around for the year. Like a loser.
And it’s still mostly blank.
Now, I actually use my diary – a cheap and nasty looking one.
But it works for me. Mainly because now I actually write things in it.
And I make great use of Outlook too in terms of scheduling in tasks or appointments. That’s a great tool to have, because it prompts you for things you might have, intentionally or otherwise, forgotten about.
There are plenty of planning apps etc. around these days, for those of you who have left the paper-bound world far behind. Lots of different tools.
Only any good, of course, if you actually use them.

So, that’s it on the planning and saving time front.
Sure, others may give you many more guideleines and tips, but these things worked for me. Okay, I don’t pretend that any of this will radically change your life when it comes to managing your time, but hopefully there has been some food for thought there – no magic pill – but a few things for you to think about.

And I will leave you with the thoughts of Henry David Thoreau, the American author and philosopher, when he once said, “It’s not enough to be busy, so are the ants. The question is, what are we busy about?”

Enjoy your day!

Count Lustig plied his deceptive trade in the early 1900s. As a conman, he was exceptional and whilst he may have started on a small scale, he eventually worked his way up to one of the most famous scams of all time.

One of Lustig’s early frauds used what he called the money-printing box.
To unsuspecting wealthy, and more accurately greedy, targets he would show them how the box ‘printed’ a $100 dollar bill, but whilst doing so, complained that it took more than six hours to print each one.
If only he could get it to work faster, he would lament.
The victim, believing that with a bit of patience there was huge money to be made would purchase the box, usually for a large sum, only to realize twelve hours later that, after the box had produced two more $100 bills, only blank paper came out.
By that time, Lustig was of course long gone.

Lustig later graduated to his most celebrated feat, that of selling the Eiffel Tower to an unsuspecting scrap metal dealer whilst posing as a French government official; a truly remarkable achievement, it has to be said.
In fact, he came within a whisker of selling it on a second occasion too.
At a later stage, Lustig is also said to have convinced Al Capone, the famous gangster, to invest $50,000 in a stock deal – a big sum in those days. Lustig held the mafia man’s money in a bank for two months – pocketed the interest – and then returned it to him, claiming that the deal had fallen through.
Impressed with Lustig’s honesty, Capone gave him a reward of $5,000 which was the whole idea of the scam in the first place.
This guy was a real chancer if ever there was one.

From a less distant era, you are more likely to have heard of Frank William Abagnale Jr., the notorious con artist from the 1960’s upon whom the movie ‘Catch me if you Can’ is loosely based.
He also rates highly for his ingenuity and audacity.
His exploits are legendary and include impersonating a doctor and an airline pilot where he succeeded in flying around the world for free. Now that was some achievement.
Frank was eventually caught and has now turned over a new leaf having established a respected consulting company advising corporations on fraud prevention.
Poacher turned gamekeeper you might even say.

Ah, yes, it can be quite funny to marvel at the sheer neck of these famous fraudsters.
But, if you run a business today, fraud is no laughing matter.
Far from it.
Each business is different of course, so the risks and extent of fraud can vary greatly and there are no quick-fixes or ‘one-size-fits-all’ solutions to counteracting fraud.
Now, let me be clear, I am no anti-fraud expert, but I recently came across a research paper in the Journal of Economic Crime Management which explored something called the ‘Fraud Management Lifecycle’.
(See Ref. below).
Anyway, I found it interesting and thought it was worth sharing with you.

Although the Fraud Life Cycle doesn’t offer practical advice on how to combat fraud – it’s more a conceptual framework – I think it still offers a useful model to guide discussions about fraud-related issues within any businesses. Okay, it doesn’t provide solutions, but at least it can serve to focus the analysis.
It’s worth a look, I think.
In doing so, it is worth noting that, for the sake of space, I have combined some of the stages below from what was presented in the paper. Also, these stages should not be considered as sequential activities and may of course overlap or even happen in unison:

Prevention and Deterrence
Successful prevention and deterrence of fraud are, of course, the preferred options for all business owners and managers. And the focus of any activities here is based on the twin arguments that prevention is better than the cure and that, for the most part, those interested in committing fraud prefer to follow the path of least resistance – they like the easy life.
As a result, anything that can be done to either prevent, or increase the difficulty of committing, a fraud must be explored.
There is also a slight distinction made in the article between Prevention and Deterrence.
Prevention means ‘hardening the target’ through effective security systems of various kinds. Deterrence, on the other hand, means placing hurdles in the way of those who attempt, or even manage to bypass the security arrangements; for example, adding some form of verification process to online transactions increases the deterrent value because the fraudster must also figure out how to bypass that additional hurdle.

Detection and Mitigation
Detection means the range of activities you have in place which help you to identify and locate fraud either prior to, during, or after its completion.
Mitigation focuses upon quick responses which are designed to contain the extent of the fraud, limit the amount of losses and ultimately reduce the effort and expense necessary to ‘clean up’ after.
Naturally, the faster you can detect and mitigate against any fraudulent activity the better for all concerned – both for your business and your customers.

Analysis and Policy
Analysis relates to anything you can do to better understand how the fraud has occurred, despite all your deterrence, detection, prevention, and mitigation activities. What are the crucial lessons to be learned?
Policy, in this context, means applying those lessons through creating, evaluating, communicating, and assisting in the deployment of additional fraud policies and procedures which will reduce the vulnerability level in future.

Investigation and Prosecution
The objective of any ‘Investigation’ activities undertaken must clearly be to seek to gather as much evidence as possible which will help to stop repeated problems in future, support the recovery of losses and/or lead to the prosecution of those involved.
These investigations will naturally involve internal and external components with the support of law enforcement agencies.
Prosecution activities should have three main aims: to punish those involved, to restore/maintain/enhance the reputation of your business and to obtain recovery or restitution where possible.

Although none of the above was necessarily new to me, I did find this a useful general framework to guide my thinking about the issue of fraud, because it pulled all the critical considerations into the one place.
Hopefully you will find it helpful in some way too.
As I said, it’s limitation is that it doesn’t answer the ‘how-to’ concerns, but it certainly could help you to focus your questions when looking at your current approach.
What the author of this study did conclude, however, was that “successful application of the theory into practice will require a sequence of intervention activities. The activities proposed are:
• identification of environmental risks and constraints;
• identification of existing and missing interactions between the various stages;
• identification of the correct resource balance among the stages;
• identification of technical improvements and enhancements to facilitate fraud reduction;
• introduction of a new fraud management philosophy focused on the continual improvement of technical tools and the successful balancing of the activities in and among all the stages in the fraud management lifecycle.”

Of course, in strengthening your business against the potential for any type of fraud, a key challenge you face is how to create systems and procedures that reduce the potential for, and impact of any fraudulent activity, whilst at the same time, do not place too many cumbersome obstacles in front of the legitimate customers who want to do business with you.

It’s always a difficult balancing act.

Enjoy your day!

(Research Paper Reference – The Fraud Management Lifecycle Theory: A Holistic Approach to Fraud Management by Wesley Kenneth Wilhelm, Manager, Strategic Planning, Fair Isaac Company)

- “I bought the HTC Sensation phone in London last week and the damn thing has caused me nothing but trouble ever since,” shouted the voice at the other end of the line, practically foaming at the mouth, or so it seemed.
“I’m sorry,” I replied “but you have a wr…”
- “I don’t give a f*** how sorry you are; what I want is for you to explain to me why I can’t send or receive texts –my service provider tells me there is nothing wrong their end, so it has to be a problem with the phone. I’ve tried everything to fix it.”
“Look,” I tried to explain again “I can’t actually help you bec…”
- “Don’t tell me what you f***ing can’t do. Tell me what you will do to sort this out.”

I should probably explain what was happening. You are likely confused.
You see, for the past couple of months, I have been getting calls from irate HTC phone customers all over Europe who are having problems with their cell phones. I have no idea why this is suddenly happening; likely, it’s some sort of confusion with my business being called HTC Consulting.
Whatever’s causing it, it’s really becoming a pain in the neck because, on average, I get four or five calls a week, and a ton of emails. Plus, since Christmas, it has been even worse, what will all the people who received new phones as presents.
It’s really starting to drive me nuts.
I contacted HTC about the issue, but they more or less said ‘so what?’.

Now, normally I just explain to the caller in question that they have a wrong number and then that’s the end of the matter.
But this particular guy was being a real pig, and I do mean a pig: rude and aggressive – two of my pet hates all rolled into one.
I know, I know…I could have just hung up on him, I guess, but he managed to wind me up.
So, I decided to have some fun at his expense.
Plus, it was a fairly quiet day.
And, I was a bit bored.

“Okay, Sir,” I said, “let’s see if I can help you to sort out the problem once and for all. But, I’ll have to ask you to calm down, please. . .now, I just need to call up the operating manual on the screen here, so I can work through the issue with you. It’s the Sensation model you said, right? I’m just going to put you on hold for one second . . .”
- “Don’t put me on….”

I did put him on hold.
And made him wait a minute or two for good measure.

“Right, Sir, I have the manual for that model on-screen here in front of me now. . . so, you can’t send or receive texts, is it? Hmm. . .let me see. . .have you tried switching the phone on and off?” I asked.
I can’t repeat the answer he gave me – this blog goes out before the watershed – but suffice it to say that he told me, in his very flowery language, that I was an idiot.
“Okay . . right. . .let’s see what else they recommend here,” I continued, tapping the keys on my PC for added effect “oh, yes. . . have you tried shaking the phone?”
- “Shaking?” he asked with a few muttered expletives attached.
“I know,” I agreed, “sounds strange to me too, but there are some notes here from our other support agents who say it seemed to resolve the issue for them.”

Unbelievably, he appeared to do what I suggested, because the line went quiet and then he came back on a moment later to let me know it hadn’t worked. . . and to inform me that I was an even bigger fool than he first thought.

“Oh. . .right, that’s a shame, isn’t it?” I said. “Let me see what else we can do. . .oh, yes. . .there is just one last thing to try so. . .have you considered talking nicely to your phone and asking it to work?”

He paused for a second.
Then he hung up. Think he figured out by then that he had the wrong number.

Okay, I’ll admit, it was a fairly childish thing for me to have done. But he was a real jerk and I just couldn’t help myself.
Anyway, the incident got me thinking about complaint handling.

As you well know, complaints are a fact of life in any business.
What’s more, although they are often quite challenging to deal with, complaints – when accurate and justified, I mean – are actually a great opportunity to help us to identify where we went wrong, to learn the lessons, to make the necessary changes and ultimately to get better as a result.
From a business perspective, I think you need to consider two elements as regards the service recovery process; namely, how the complaint is managed in the first instance, and then how the learning from the complaint is captured and applied.

1. Managing the Complaint
I won’t insult your intelligence by spending too much time on this aspect of today’s post, but you should really ask yourself if all your employees are ‘consistently’ following an effective approach when dealing first-hand with a complainant. Key things you want them to be doing during those interactions include:

Identifying the problem and establishing all the facts

• Do your people stay calm and composed, regardless of how heated the complainant is?
• Do they listen/make eye contact with them/show genuine concern?
• Do they use active listening techniques – not interrupt the complainant, other than to apologise?
• Do they ask questions to identify/clarify the real problem?

Offering an apology, and thanking the guest for informing them about the problem

• Do your people think before they respond – do they correctly decide whether they can resolve the issue themselves or if they need assistance from someone more senior?
• Do they ensure that they have all the facts before making their response?
• Do they begin that response by apologising once again and by thanking the customer for bringing the matter to their attention?

Negotiating a Solution, or seeking help if it’s outside their power to resolve

• It may take some negotiation to resolve the matter. Do your people know how to do so, especially for bigger complaints, and do they only promise what they know can be delivered?
• Do they inform the complainant if they have to seek assistance from someone more senior, but at the same time, not leave them waiting for too long whilst doing so?

Act quickly when a solution is agreed

• Once a solution is agreed – do your people act quickly to resolve the matter?

Anyway, as I said, I won’t spend too much time on this aspect of the process, as it is fairly standard stuff.
Still, you do need to ensure that all your people can effectively handle each and every complaint interaction; doing so requires you to consider a range of issues such as agreeing a defined approach for dealing with complaints, empowering your people to make on-the-spot decisions, providing them with training and so on.

2. Learning from the Complaint
More importantly, at least from a business improvement perspective, you should also ensure that you have a rigorous system in place which helps you to capture complaints and define the lessons that arise from them, so that you can make the necessary changes which help you to get better over time.
In my experience, a common feature of all stand-out businesses is this capacity for continuous improvement. (Naturally, there is much more to the continuous improvement process than simply learning from complaints, but the focus today is on this narrow area.)

For sure, part of the ability to constantly push for better performance is undoubtedly attitudinal in nature – do you, and your team actually want to continuously improve? That said, having a defined structure in place to facilitate that improvement is also an important factor to consider; after all, it will not happen by accident and periodic, is not the same thing as continuous improvement.

Key elements in your continuous improvement process – as regards learning from complaints – should include:

By having such a process in place you capture and apply the lessons in a structured and meaningful way.
You also send out a strong message to your team that you treat complaints seriously.
As a result, you expect them to do likewise.

I’ll leave you for today with the words of Bill Gates on this issue when he said “Your most unhappy customers are your greatest source of learning“.

They undoubtedly are, but without a defined process which helps you to turn that bad news into good, then they are of no real value to the business.

Enjoy your day!