Cybersphere’s newest celebrity, Steven Slater - the Jet Blue flight attendant who announced to the world he was quitting his job by releasing the emergency chute at JFK and, literally, leaping to freedom – was reportedly provoked by a difficult passenger who pushed his patience too far.  For his actions, Slater has become an instant folk hero.

If Slater is to be believed, it may be that, in this instance, “the customer is not always right.”  But some pundits say that Slater, like any other flight attendant on any given day, should have bitten his tongue and continued working normally despite the apparent abuse from the passenger.  But at what point do we, as individuals and as business leaders, draw a line and take responsibility for the well-being of employees over demanding and/or abusive customers? 

Many successful, savvy executives (including Richard Branson, founder of Virgin Atlantic Airways, and Herb Kelleher, CEO of Southwest Airlines) have built their empires on flexible employee-customer policies.  They believe that the happiness of their employees comes first, because disgruntled staff are not well-positioned, nor, at the very least, motivated, to provide excellent customer service.   Kelleher once wrote a personal reply to a passenger who regularly flew on Southwest, and, consequently, complained after every flight.  ‘Dear Mrs. Crabapple, We will miss you. Love, Herb.’

Yet, when an employee accepts a job offer, shouldn’t they be aware of, and take some responsibility for, the type of stress (and abuse?) inherent in the new position?  Certainly, employers should be recruiting people with the right temperament for the job and providing them with adequate customer training.  But it is not always possible to walk away from challenging customers, just to keep your employees happy.  Small businesses in particular face a dilemma when dealing with difficult customers, as a single lost account could mean disaster.

So, if the customer is not always right, where do you draw the line between ‘right’ and ‘wrong’?  Set the line too high or too low, and you risk alienating either the customer or the employee. Finding that perfect balance is difficult, and different for every business.

For information about how M Squared Consulting can help you manage your flexible workforce strategies, visit www.msquared.com or call 888-818-2505.

By guest blogger Margaret Jennings, M Squared Consulting

Keeping your staff motivated and engaged can be far from straightforward. 

Author  Peter Bregman, in a recent blog in the Harvard Business Review, suggests a simple concept to help:  connect your staff with the source of an idea or business practice to inspire their commitment through a sense of ownership. By doing so, he finds employees are “always happier with the outcome. They feel something deeper than the success of a project gone well. They feel pride of ownership. They feel satisfied by the journey that brought them to their success.”

Larry Sternberg, writing for Workforce.com (‘Give Employees What They Need’), takes this idea further and believes there are two interlinked principles to keep in mind when motivating staff.  Firstly, “Each person has a unique configuration of need - their own goals, wants, desires and aspirations.” And secondly, “People stay in organizations that meet their needs.”

He provides some detailed tactics for meeting such needs.  In summary;

1.     Ask your staff what their needs are.

2.     Don’t be afraid to change precedent for your best performers.

3.     Make staff feel important, have time to listen to them.

4.     Emotionally rehire people.

Not surprisingly, in today’s economy many employees have diminished confidence in employment stability, feel vulnerable and are no longer happy working for someone else.  The trend toward a flexible and self-employed workforce looks set to continue.  Projections from the U.S. Bureau of Labor Statistics predict that the flexible workforce will grow 19% through 2016, almost twice the rate of total job growth of 10%.

This change in approach to employment has an upside for employers too.  More on this topic in upcoming posts.

To help your organization leverage the top-tier of the flexible workforce, visit www.msquared.com

An article this week in the Wall Street Journal by Mark Whitehouse expands on this topic.  The piece, titled “Some Firms Struggle to Hire Despite High Unemployment”, cites why, despite the tough economy, some companies are having a difficult time filling job openings.

Some excerpts: 

…With a 9.5% jobless rate and some 15 million Americans looking for work, many employers are inundated with applicants. But a surprising number say they are getting an underwhelming response, and many are having trouble filling open positions.

“This is as bad now as at the height of business back in the 1990s,” says Dan Cunningham, chief executive of the Long-Stanton Manufacturing Co., a maker of stamped-metal parts in West Chester, Ohio, that has been struggling to hire a few toolmakers. “It’s bizarre. We are just not getting applicants.”

Employers and economists point to several explanations. Extending jobless benefits to 99 weeks gives the unemployed less incentive to search out new work. Millions of homeowners are unable to move for a job because the real-estate collapse leaves them owing more on their homes than they are worth.

The job market itself also has changed. During the crisis, companies slashed millions of middle-skill, middle-wage jobs. That has created a glut of people who can’t qualify for highly skilled jobs but have a hard time adjusting to low-pay, unskilled work like the food servers that Pilot Flying J seeks for its truck stops.

… Matching people with available jobs is always difficult after a recession as the economy remakes itself. But Labor Department data suggest the disconnect is particularly acute this time around. Since the economy bottomed out in mid-2009, the number of job openings has risen more than twice as fast as actual hires, a gap that didn’t appear until much later in the last recovery. The disparity is most notable in manufacturing, which has had among the biggest increases in openings. But it is also appearing in other areas, such as business services, education and health care.

If the job market were working normally—that is, if openings were getting filled as they usually do—the U.S. should have about five million more gainfully employed people than it does, estimates David Altig, research director at the Federal Reserve Bank of Atlanta. That would correspond to an unemployment rate of 6.8%, instead of 9.5%.

… Longer-term trends are at play. For one, the U.S. education system hasn’t been producing enough people with the highly specialized skills that many companies, particularly in manufacturing, require to keep driving productivity gains. “There are a lot of people who are unemployed, but those aren’t necessarily the people employers are looking for,” says David Autor, an economist at the Massachusetts Institute of Technology.

Manufacturers of high-precision products such as automobile and aircraft parts are in a particularly tough spot. Global competition keeps them from raising wages much. But they need workers with the combination of math skills, intuition and stamina required to operate the computer-controlled metalworking machines that now dominate the factory floor.

Clearly, there are many angles to explore here, ranging from the state of the economy to the effects of long-term unemployment benefits to the quality of our public education system. 

For the high end of the market, there is also a healthy debate about whether there are enough skilled workers in the right place at the right time to help companies advance their strategic priorities.  Many companies continue to seek out interim specialists and consulting talent to help them during the peaks and valleys of normal business cycles.

Stay tuned as we continue to follow developments on this important subject.

To help your organization leverage the top-tier of the flexible workforce, visit www.msquared.com or call 1-888-818-2505

An excerpt:

Have you ever walked into an airport, seen that there is nobody in line at the check-in counter, but still made a bee-line for the self-service kiosk? Better yet, have you ever waited in line for an ATM machine even though there is nobody in line for the teller inside the bank?

If you answered “yes” to either of these questions, you’re not alone. Most customers these days demonstrate a huge — and increasing — appetite for self-service, yet most companies run their operations as if customers prefer to interact with them live.

In our research on this topic, we’ve found that corporate leaders dramatically overestimate the extent to which their customers actually want to talk to them. In fact, on average, companies tend to think their customers value live service more than twice as much as they value self service. But our data show that customers today are statistically indifferent about this — they value self-service just as much as using the phone. And guess what? By and large, this indifference holds regardless of their age, demographic, issue type, or urgency.

This attitude toward self-service has been a long time coming. Two-thirds of the customers we surveyed told us that three to five years ago, they primarily used the phone for service interactions. Today, less than a third do, and the number is shrinking fast.

What is it that makes self service so appealing? Maybe it’s the efficiency of the interaction — the airport kiosk is probably faster than interacting with a check-in agent — but that wouldn’t explain why we go out of our way to take care of our service needs ourselves. On a psychological level, it might have more to do with the unique element of control that self service affords. Or, maybe this self-service love affair is a product of our infatuation with gadgetry and electronic communication. All fairly benign explanations, to be sure.

But here’s a hypothesis that would be concerning if it’s right: maybe customers are shifting toward self service because they don’t want a relationship with companies. While this secular trend could be explained away as just a change in consumers’ channel preferences, skeptics might argue that customers never wanted the kind of relationship that companies have always hoped for, and that self service now allows customers the “out” they’ve been looking for all along. For managers hell-bent on deepening relationships with their customers, that’s a sobering thought.

Consider this: Running your company as if customers want to talk to you isn’t just expensive, it’s potentially undermining your efforts to build longer-term loyalty. Our research shows that customers who attempt to self serve, fail, and are forced to pick up the phone are 10% more likely to be disloyal than those customers who were able to fully resolve their issues in their channel of choice. As one CFO remarked to us recently, “When you think about the relative cost of live service and the disloyalty effect of channel switching…it’s like paying your customers to be disloyal to you.”

How often does channel switching happen? All the time.

We found that a staggering 57% of inbound calls come from customers who first attempted to resolve their issue on the company’s website. And over 30% of callers are on the company’s website at the same time that they are talking to a rep on the phone. That’s a lot of frustrated customers.

For information on how M Squared consultants can fine-tune your customer strategies, please call 1-888-818-2505 or visit www.msquared.com

Despite being aware that balance in all things in life (including business) is a good thing, I was quite surprised to read some of the figures quoted by Whitney Johnson in her recent HBR post about the impact women in leadership positions can have on a business.

She cited findings by the University of Michigan and Cornell University that showed that “…IPOs of companies with greater gender diversity outperformed (others) by as much as 30%.”   She also quotes the research of David Gaddis Ross of Columbia University that “organizations most inclusive of women in top management achieve 35% higher ROE and 34% better total return to shareholders versus their peers.”

It is not difficult to reason that there are significant benefits for a business with a female presence in senior management in any business.  However, the 2009 Catalyst Census of FORTUNE 500 Women Board Directors revealed that less than one fifth of companies have three or more women on their boards, and more than 40 percent have no women directors whatsoever.

How can organizations increase the presence of women in leadership roles and across the workforce?  An article in HR Management offers insight from some leading companies:

• “What General Mills does is look at everything from soup to nuts. It looks at the hiring of women to make sure that they’re bringing in women that they know are going to stay and succeed. And, interestingly, the turnover rate is very low at General Mills. They think long-term. They hire someone to stay and not just to fill a gap.”
• Healthcare company WellPoint consistently ranks in NAFE’s list of the top 50 companies for executive women. CEO Angela Braly is also the only woman to serve as CEO of a Fortune 50 company.  Their company ethos is “…you don’t have to check who you are at the front door. Bring your whole self to work. You’re not just an executive, but you’re an executive and a mom or a dad, if you have kids, and it’s important that you be able to spend time on both.”  They also have many work-at-home programs.
• IBM has been supporting women in the work place for over 120 years.  “Work/life integration is extremely important and luckily IBM is a leader in this field. For example, we offer flexible work options and job sharing, and in 2000 IBM created a $50 million global work/life fund to support our employee’s child and elderly care needs around the world.”

Clearly, gender diversity in corporate leadership is good for business, and there is no shortage of examples to demonstrate that fact.

To help your organization leverage the top-tier of the flexible workforce, visit www.msquared.com

An excerpt follows:

Over the course of his finance career, Jeff Henderson, CFO of Cardinal Health Inc., has hired consulting firms to offer insight on strategy, outsourcing initiatives, expense-reduction tactics, and large IT projects. While he believes strongly that consultants are an important management resource, he, like many other finance chiefs, is wary of their downsides, from high cost to inferior advice. “I’ve learned the hard way,” he confides. “You can spend too much, not get the service you thought you were getting, and end up with the second-tier team [rather than] the ’stars’ you were told you’d get.”

Such complaints about consulting engagements are commonplace. As David Bean, vice president of finance at Vertex Pharmaceuticals, a Cambridge, Massachusetts-based biotech company, sees it, “There is a tendency among consultants to get hired merely for the purpose of getting more work.” In CFO’s recent survey of 400 finance executives, the majority — 55% — said they were only somewhat confident that their consulting spending was producing an acceptable return on investment, while 16% said they were not confident or didn’t know: not exactly a stunning endorsement of the consulting universe.

But the situation may be about to improve. Thanks to a spate of mergers and acquisitions, along with the emergence of newly energized firms, a very different consulting industry is rising from the ashes of the recession, one in which competitive pressures are driving prices down for buyers.

In addition, new pricing structures, in which consultancies are willing to take it on the chin financially if their promises fail to materialize, are emerging. All told, prices for consulting services have dropped anywhere from 5% to 20% in the past year. “It’s a buyer’s market out there,” says Lynne Schneider, senior analyst at Kennedy Consulting Research & Advisory.

To be sure, the U.S. consulting industry, remains a financial powerhouse. Last year, it generated $397 billion in revenue ($240 billion for IT consulting alone), according to Jenny Sutton, co-author of Extract Value from Consultants (Greenleaf Book Group, 2010). That’s a mere 2% decline from 2008, suggesting that, despite client misgivings, consulting remains virtually recession-proof. Sutton projects that total consulting revenue will resume an upward trend this year.

The industry tumult has several causes. For one, the Big Four accounting firms have returned to consulting with a vengeance now that Sarbanes-Oxley-related compliance work is drying up. In addition, a wave of megamergers has created more-comprehensive “soup-to-nuts” consultancies, particularly in IT. In the past 18 months, hardware providers Dell, Xerox, and Hewlett-Packard have acquired Perot Systems, ACS, and EDS, respectively. Now, “the acquirers are looking to leverage their existing distribution channels to sell more of everything, and they are more willing to cut their rates if asked” says Susan Tan, research director of IT services at Gartner.

Be Prepared
But this metamorphosis also poses a risk: in their rush to compete, consultancies may be more prone than ever to overpromise and underdeliver. “Clients hire a multiservice consulting firm to do strategy, and then are pressured to hire the same firm to implement that strategy even though this may not be its core expertise,” says Sutton. “Too many buyers end up using consultants in areas that are not their power alleys.”

Of course, clients also bear some responsibility for engagements that come unglued. One of their main peccadilloes, some experts say, is driving too hard a bargain. “We’ve seen buyers press the consulting firm to discount services so far that they ended up with the ‘B’ team on their projects,” Kennedy’s Schneider says, resulting in “bargain basement” advice.

Clients also suffer for not being well prepared. A “major trap,” says Sutton, is allowing the consultant to define the scope of the engagement. “It’s up to the buyer to know what problems it has to solve. And it should do that by spending more time upfront defining its needs,” she says.

To help your organization leverage the top-tier of the flexible workforce, visit www.msquared.com

Most managers agree that achieving sustainable, organic profit growth requires delivering on a clear, precise customer promise; continuously improving on that promise; periodically innovating beyond the familiar; and supporting all of that with an organization open to new ideas and negative feedback.

But how can senior executives ensure that everyone in the organization grasps and supports the brand promise? How can managers create an open organization, so that rank-and-file employees are unabashed about sharing customer complaints with upper management?

Based on interactions with more than 150 senior managers and a wide-ranging review of pertinent case studies, marketing professors Patrick Barwise and Seán Meehan developed five questions managers can pose to help assess their organization’s ongoing ability to satisfy customers–and thereby ensure that their products and services stay relevant.

No. 1: Can your middle managers accurately describe your customer promise?

By asking middle managers this question, senior executives can gauge whether those further down in the hierarchy understand the customer promise. Encouraging middle managers to articulate the customer promise can also help senior executives learn how clear and explicit the customer promise really is. The more clear and explicit it is, the better it is.

For example, Procter & Gamble’s Tide detergent promised to get clothes cleaner than any other product when it launched in 1946. This clear and explicit promise was–and remains–easy to state; it is not subject to misinterpretation by the customer. It is unambiguous. By contrast, “overnight delivery” implies delivery first thing in the morning. But to an office worker, it probably means 9 a.m., whereas to a construction site foreman it could mean 7 a.m.

No. 2: Can all the members of your senior executive team name the three things that most undermine trust among your existing customers?

Since bad news tends to get filtered on its way up the hierarchy, there’s a danger top management won’t hear about the organization’s failures to deliver on its customer promise. The goal of this question is to transmit the voice of unhappy customers to the top of the company.

Yes, focusing on customer dissatisfaction–which typically occurs when the company fails to deliver on its promise–is hard, because it involves pointing fingers or revisiting bad decisions. But focusing on dissatisfaction also allows managers to uncover and act on the root causes. Why is this important? Because customer dissatisfaction undermines customer trust, which in turn diminishes the value of the brand.

Nearly 60% of companies are facing leadership talent shortages that are impeding their performance. Another 31% expect a lack of leadership talent to impede their performance in the next several years. Yet, in 2009, U.S. companies spent an estimated $12 billion (24% of their overall training budgets) on leadership development programs and services. By any reasonable standard, what we are currently doing to grow and develop future leaders is not working. Here are five critical attributes that we believe are necessary for developing the leaders of today and tomorrow:

1. The best learners make the best leaders. We must teach people how to learn leadership from life experiences. We argue that learning leadership is a function of how people approach, go through, and reflect on developmental experiences — a process we call “mindful engagement,” We need to stop teaching leadership theory in a vacuum, and start teaching people how to learn leadership from real-world experiences.
2. Leadership as a set of principles. Business education is largely oriented toward teaching an important but narrow set of technical knowledge and skills. We need to expand our teaching to encompass a set of leadership principles that can be globally applied across situations. Doing so will build an adaptive capacity that enables people to more effectively lead in today’s complex and dynamic business environment.
3. Reward leadership development (FINALLY!). All companies pay lip service to the importance of developing people, but how many companies actually reward (with any significance) the development of people? Answer: very few. Also, how many companies penalize managers for hoarding key talent? Answer: almost none. Yet, managers often do everything they can to avoid losing key talent to other opportunities because, as one executive put it to us the other day: “I can’t afford to lose my best people.”
4. Leadership development at all levels.  We previously argued that leadership is not about position. If that is true, then why do most leadership development programs focus on senior executives? We need to expand our focus to figure out ways to efficiently and economically develop leaders throughout the organization.
5. Keep it simple. Leadership is complex, but leadership development cannot be. We must provide key talent with clear metrics and development priorities that provide a straightforward roadmap for realizing their leadership potential. Unfortunately, that is not the case in most companies. One Fortune 500 company that we are working with developed a leadership competency model that specifies 54 distinct competencies across 15 different leadership skills. The result? Employees are confused, and assessment data are poor. Instead, identify the three or four competencies that really differentiate top performers across different levels of the organization, and then reward and promote based on those competencies.

Contributors:  Sue Ashford is Associate Dean for Leadership Programming and Executive MBA Program and the Michael & Susan Jandernoa Professor of Management and Organizations at the at the University of Michigan Stephen M. Ross School of Business.  Scott DeRue is an Assistant Professor of Management and Organizations at the University of Michigan Stephen M. Ross School of Business.

For more information on leveraging leaders from the flexible workforce, visit www.msquared.com.

For example, early in 2008, American soldiers training Afghan and Iraqi armies were having problems using a rocket-propelled grenade launcher. The equipment was old and had a tendency to jam, misfire and explode prematurely.  Frustrated, a unit commander posted a question to one of the U.S. Army’s communities of practice, which are online forums where soldiers ask questions and share ideas with peers around the world.

“Within a few days, someone who’d had a similar experience with the launcher posted a simple solution to the site on how to safely prevent misfiring,” says Mike Prevou, president and co-founder of Strategic Knowledge Solutions and senior knowledge management advisor to the Army in Leavenworth, Kansas.

The solution worked, and when the unit commander followed up to discuss his experiences, the issue became a hot topic in the community. The conversation thread was soon picked up by the Army’s safety commander, who issued a formal safety policy on how to deal with the rocket launcher’s safety issues that was sent out to all the units using this equipment. And it all took place within 15 days of the original post.

“Without the community, those soldiers may never have found a solution to their problem, and they probably would have just put the equipment away,” Prevou says.

Communities of practice aren’t just valuable for military personnel. They are becoming vital corporate tools that allow employees with similar jobs or interests to get advice and share best practices. “Communities of practice are a super-fast way for users to produce and share content,” says Eric Suave, CEO and co-founder of Tomoye, a collaboration software vendor in Ottawa. Prevou uses Tomoye’s technology to build the Army’s communities. “It’s a more responsive way to share information when it’s needed that allows organizations to collect ideas for formal training.”

That capturing of knowledge is critical for organizations that need to tap into the expertise of a far-flung employee population. It’s also an important issue for organizations with aging employee populations who might soon retire, taking with them important but informal knowledge about processes, customers or corporate culture.

 ”Both groups can work in concert,” Suave says. “On one side you have fast dissemination of information; on the other you have long-term planning that can draw on what people are talking about and turn it into policies and core content.”

This combined value is why communities of practice are cropping up in organizations around the world. They link globally dispersed workers who can serve as mentors to each other and share knowledge in an informal setting. There are pockets of excellence everywhere in organizations, Prevou says. “Communities of practice are a tool to tap into that excellence. It’s a way to share knowledge and build networks among people who might otherwise never connect.”

To help your organization develop strategies about how to best leverage the top-tier of the flexible workforce, visit www.msquared.com

After hundreds of focus groups and thousands of interviews with employees in a variety of industries, Gallup came up with the Q12, a 12-question survey that identifies strong feelings of employee engagement. Results from the survey show a strong correlation between high scores and superior job performance. Here are those 12 questions:

• Do you know what is expected of you at work?
• Do you have the materials and equipment you need to do your work right?
• At work, do you have the opportunity to do what you do best every day?
• In the last seven days, have you received recognition or praise for doing good work?
• Does your supervisor, or someone at work, seem to care about you as a person?
• Is there someone at work who encourages your development?
• At work, do your opinions seem to count?
• Does the mission/purpose of your company make you feel your job is important?
• Are your associates (fellow employees) committed to doing quality work?
• Do you have a best friend at work?
• In the last six months, has someone at work talked to you about your progress?
• In the last year, have you had opportunities at work to learn and grow?

In any economy it pays to have engaged employees.  The answers to the questions above will shine a light on how well you’re doing.

For information on how to develop your contingent workforce to the fullest, contact M Squared Consulting at msquared@msquared.com or 1-888-818-2505.