Archive for January, 2008
On December 14, 2007, Revenue-IQ posted “Consequences” about executive mistakes that cost 1,000s of jobs, yet the execs can easily find new jobs.
On January 27, 2008 the NY Times ran “What’s $34 Billion on Wall Street?” about highly-paid executives being courted for new jobs after their mistakes lose 1,000s of jobs.
Coincidence? Or business savvy?
Either way, the article “What’s $34 Billion on Wall Street?” adds several insights.
1) On Wall Street, the system failed, not the exec. It was bad luck, so give them another chance.
Takeaway: Find a forgiving industry to work in.
2) Personal relationships at the top change failures into lessons learned. The higher up the food chain your friends are, the easier it is to see the exec as gaining valuable experience, rather than just making a colossal mistake.
Takeaway: Find forgiving friends. The higher up the better.
3) Human nature seeks someone to blame. In large failures, that’s the exec in charge. They get the big money, and the big responsibility. But someone’s got to take the rap.
Takeaway: It can be unforgiving at the top. But you already knew that.
I’ve emailed the NY Times reporter asking if my story initiated his and am awaiting his answer 
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Chris Arlen
President, Service Performance
Technorati: layoffs, learning, management
January 28th, 2008
Can you find a building service contractor that doesn’t offer green cleaning, or environmentally friendly service and products?
It’s time for the me-too bandwagon.
First movers (those committed to green cleaning early) are likely seeing less benefit from being first now that everyone else is in it.
Being first gave firms a head start refining services, working out profitability, with the hopes of capturing lots of new business.
But with the current availability of green how-to information (LEED, USBGC, ISO-14000, Green Seal, etc.) latecomers can ramp up fairly quickly. Doesn’t matter if they have limited green experience. Their marketing efforts tell customers they’re green.
And that leads to a strategic question of the moment.
Is green a competitive advantage now?
My take is no.
Green is now a requirement.
Like having a safety program, online training, or managing quality control with technology.
If you don’t have these, you’re probably not the most competitive. It doesn’t mean you’re not in business. But you may not be in a year or two. Same for having green services. Better have ‘em now, than not.
Does green guarantee more business?
As you’ve guessed, green services can add incremental business. Or help you compete and keep a portion of what you already have.
Customers are the Driver
The driver is how fast customers buy green. Literally, how fast will they spend more to be green.
To understand how that evolves, I came up with the Green Adoption Lifecycle. OK, I didn’t create it, but adapted it from the Technology Adoption Lifecycle, read more here.
As long as green services cost more than traditional ones and there’s no legal requirement, customers will get there when they get there. And that will happen along the lines of the Green Adoption Lifecycle.
The Lesson
Be green now, and really good at it. And look for the next competitive advantage coming down the pike. I have an idea what that may be.
Look for next week’s our upcoming blog
“What’s Next: The Triple Bottom Line”
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Chris Arlen
President, Service Performance
Technorati: communication, green cleaning, marketing
January 25th, 2008
The secret hidden in Roswell’s hangar is not an alien body or spaceship.
It’s Gap 5.
Gap 5 is the reason service contracts are terminated. The bigger the gap, the harder to retain the account. And for contractors, shrinking Gap 5 means keeping contracts longer.
Gap 5 is the difference between customers’ service expectations and their perceptions. As you can guess, there are four other gaps before Gap 5. But they only contribute to Gap 5. Gap 5 is the big enchilada. It’s why customers change service contractors.
Why is Gap 5 in Roswell?
Because it’s a secret.
Customers don’t tell contractors what they expect or how they’ll perceive service. Not explicitly. Not in ways contractors can work with. Also, customers aren’t being asked, or contractors don’t know how to ask.
Specifications aren’t in Roswell
Don’t get fooled into thinking specifications tell contractors what customers expect. Specs only tell the “what”, and sometimes the “where” and “when”. Rarely, if ever, do specs spell out the “how”, “who”, or “why” services should be performed.
When a specific task hasn’t been performed, customers cancel contracts with “you didn’t meet the specs”. However, you can bet the large majority of cancellations are much more subtle. This is Gap 5 in the flesh.
KPIs aren’t in Roswell
Key Performance Indicators are like odometers and speedometers. They show customers how far or fast service has been performing. However, they don’t state what customers are looking for, especially before service is performed.
The Importance of Gap 5
That brings us to Gap 5, which was created back in the mid 1980s as part of the ServQual model for assessing service quality. And although ServQual isn’t perfect, its Gap 5 provides a spotlight on a contract’s potential longevity.
Gap 5 Exposed: EXPECTATIONS
Gap 5 in the ServQual model shows customers’ expectations are driven from four places:
- Customers’ personal needs
- Customers’ past experiences
- Word of mouth
- Marketing communications from contractors
KEY TAKEAWAY: Only one of these factors is controlled by the contractor, marketing communications. The majority of customers’ information is outside contractors’ direct control.
This means contractors must deliver lots of value to existing customers, resolve issues quickly and to customers’ satisfaction, and treat everyone as if they’re customers for life. Because they are.
Gap 5 Exposed: PERCEPTIONS
Customers’ service is driven by two areas:
- Delivery of Service
- External Communications to Customers
KEY TAKEAWAY: Although contractors believe they’re in control of delivery and marketing, they’re not entirely. Perception is everything.
Contractors deliver service and believe customers have seen it. Not always the case. Services by nature are invisible. Customers can’t and don’t see everything contractors do for them.
Think about the day porter or guard helping an elderly visitor through the revolving doors into the building.
Contractors must tangibilize services. That’s what KPIs and Business Review Meetings help to do. But contractors must also seek ways of making their services more visible in ways that customers allow and appreciate. For example, a leave behind note on tenants’ desks when a special service has been done (washing a coffee cup?).
Not always an easy task when customers want their outsourced services to be seen as in-house by their customers.
The Roswell Conclusion
Contractors need to take actions to shrink Gap 5, or suffer high customer turnover as the consequence.
They must define customers’ expectations in ways the contractor can fully understand. Ideally, during the transition before the start of service. And in doing so, they’ll help make customers’ aware of their own expectations.
Also, contractors must make their service delivery as visible and tangible as possible, within the realms of customers’ approval. Then they must communicate their performance regularly (KPIs and Business Review Meetings).
How do you determine customers’ expectations?
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Chris Arlen
President, Service Performance
Technorati: account retention, customer service, service quality
January 21st, 2008
1/15/08: Here’s a concept “The more people you reach the more likely it is that you’re reaching the wrong people” (yup, S. Godin again). It’s the unspoken, but absolute keystone to the following business sermon, which started with All Business is Personal. The overall premise goes like this.
All business is personal
-> Everything personal is a relationship
-> -> All relationships are an exchange
-> -> -> All exchanges can become more valuable
Business requires “blocking and tackling” (pardon the sports analogy). And successful business requires better “play calling”. You have to do both. And do them well. This post is about better “play calling”.
So everything personal is a relationship. No blinding insights there. But what about…
Relationships to People We Don’t Know?
Yes, we’re in relationships with people we don’t know. Those would be our suspects. They may, or may not need our services.
So, what’s the problem? We don’t know them, and they don’t know us.
Or do they? Word travels. Gossip’s cheap. People talk. Promotions occur. Jobs are changed. And there’s Google.
Many people may know us (and our business) who we don’t know.
Later on, we may know them. And if they fit our target profile, they’re no longer suspects. They’re prospects.
The key is they’re out there first, before we know who they are.
These unknown people will hear about us from potentially many different angles.
We’d like to think they’ll be knocked out by our clever print ads, Flash/video web sites, or glossy brochures. And a small percentage will - if we’re very lucky. But don’t count on surviving this way. The numbers don’t add up.
The best and strongest first mention of us to a suspect will be personal; a referral from a customer evangelist during an RFP, or word of mouth buzz at a trade association luncheon.
It’s the metamorphosis of suspect-to-prospect-to-customer that begins with relationships to people we don’t know.
And all this business is personal.
Making it Easy to get to People We Don’t Know
Help make it easy for the people you know (customers) to spread your word. Here’s a simplified list.
1. Give ‘Em Something to Talk About
Overperform in delivery and value for your customers. You want more than extremely satisfied customers, you want ravers. Those customers are hungry to spread the good word about you. (I’m sure you’re already working on this)
2. More Than a Tagline
Provide an easily shared message. Create 1-2 short sentences that customers can remember, and then repeat in their own words. You can’t force your customers to use this message. But they’ll pick it up if you use it consistently in person, in emails, in almost every communication. And if it accurately reflects your value, your strengths and your uniqueness. Learn more about messaging here in the Leaning Tower - Part I & II.
3. Bake It In
With both the above in place, incentivize sharing. Create a simple referral program that rewards customers and your employees.
Rewards can be business related (discounts, additional services or free products) or personal (lunch, gift certificate, mention in a newsletter). Is it necessary to say be careful when giving cash rewards? Remember, appearances can be misconstrued.
Rewards are earned from referrals that call in, and/or lead to promoting the good word about your business.
Obviously the large rewards go to referrals that lead to contracts. But these can take time, and because of that don’t happened as often. The reward can be too far away from the effort.
Look for rewards you can give more often. Consider rewards for every referral that contacts you, especially those you didn’t know about.
This works for suspects that call in, even if they won’t be prospects because they don’t match your target profile. Here’s an opportunity to give a minor reward to your customers and educate them about the prospects you’re looking for.
Whatever program you come up with, make it:
- Simple to understand
- Easy to run
- Rewarding frequently & appropriately
4. Create a Target Profile
It’s essential you define what your prospects look like. How else will you know them when you come across them? Learn more about creating a target profile in Sales Plan-o-rama.
It’s also worthwhile to put some effort to find out the size of your market. This would be the number and size of target prospects. This will help you decide where and how much of your resources to spend.
How are you developing relationships with people you don’t know?
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Chris Arlen
President, Service Performance
Technorati: marketing, prospecting, sales planning
January 7th, 2008
Emperors and new clothes. Elephants in rooms. Be wary. Groupthink is out there. And management teams are extremely susceptible.
From “eyes wide shut” on a particular decision - to a culture where dissenting opinions are never heard. Or if they are, they’re fired shortly thereafter.
The purpose of decision making should be to get the greatest gain for the most stakeholders from each opportunity. So why are dissenting opinions frightening?
Because in business, teams count. Teams get more work done. Better, faster, and cheaper than individual efforts. So, if cohesive teamwork is a management goal, why would dissent be invited?
Because teamwork also comes with a potential for groupthink. And it can be lethal.
Groupthink contributed to the Kennedy administration’s failure at The Bay of Pigs by not seeking dissenting opinions to challenge their thinking. A NASA engineer identified the fatal flaw that doomed the Space Shuttle Challenger before it lifted off, but executive management all agreed it couldn’t be fatal, until the disaster proved them wrong.
When we only hear what we want, we’re driving 150 mph in the fog.
To avoid a fatal crash, it’s an absolute necessity to hear dissenting opinions. The process for hearing those views has to be built into management practices and company culture. Intentionally.
Here are a number of ways to do that. They’re simple, but then again you don’t want to be seen naked, or step in elephant pooh.
#1 - Ground Rules:
First things first. It’s important to communicate the following rules with those you’ll be asking their opinions. These are rules, not guidelines. If these aren’t followed, or fully understood, you could easily have a nuclear meltdown. Here they are:
One can present views with passion.
If it’s important, people are going to care about it and some may express themselves passionately. That’s OK, as long as the next rule is followed.
Opinions can NEVER be expressed abusively or insultingly.
Expressing one’s self passionately is great, but all expressions must be about the decision/idea. And never insulting or personal. NEVER.
Opinions will be heard, but no guarantees.
Asking for dissenting views does NOT guarantee those views will become, or affect the decision. The final decision maker is ultimately responsible. Those are organizational roles. Seems logical enough, but this needs to be stated explicitly. Otherwise there’s room for misunderstanding that people are being asked to make the decision. Not the same thing.
If opinions aren’t voiced, they won’t be heard.
Don’t complain about politics if you don’t vote. Same logic applies here. There’s no motive to change a decision unless a dissenting opinion is expressed.
#2 - Who Should Give Dissenting Views?
As many people effected by the decision as reasonably possible. How many is that? Your call. The more who feel they’re opinions are really heard - the better the implementation of the decision.
#3 - When Should Dissenting Views Be Asked For?
As often as reasonably can. However, it may not be reasonable to do that with every decision. But for the important ones that have to be flawlessly implemented, you’ll want to ask.
The rub is if you don’t normally ask for dissenting opinions, or if that isn’t part of your company’s culture, consider asking a few people at first. Then work your way up to larger decisions, and more frequently.
#4 - How Should Dissenting Views be Heard?
Group meetings are great venues to elicit dissenting opinions. Respectfully voicing and hearing opposing views in group meetings is very powerful. It walks the talk of thought diversity.
Also, asking individuals one-on-one works too, but it can take more time if you have many people to ask.
#5 - Assign A Devil’s Advocate:
For each important decision, assign someone to analyze it and tear it apart, intelligently and respectfully. Have them report in group meetings.
Rotate the devil’s advocate position for each decision. This makes sure the same person isn’t doing the dirty work each time.
#6 - You Wouldn’t Do This Anyway, Right?
There’s nothing common about sense (M.Twain), so here’s the obvious:
Don’t ridicule or point to negatives.
Don’t shoot holes after hearing dissenting opinions. Truly listen, then replay back to them their opinion to confirm your understanding. Remember, after a couple of public humiliations the dissenting view understands their ideas are NOT valued, no matter what platitudes are shared.
Hear them out.
Cutting someone off in the middle of their opinion can be a strong deterrent for dissenting views. This must be balanced with managing an overly verbose person on a soapbox. But hey, you’re good at people skills, right?
What’s at Stake?
Jobs. Mortgages. Financial survival. Of your employees. That’s what they believe. If you haven’t asked for dissenting views before and your company culture is shark infested, that’s exactly what they’re thinking.
So why should they bother? It takes a lot of personal power and organizational savvy to convince others they’re safe to voice dissenting views. It’s THE critical aspect of management. Developing the trust of those that work with you and for you. It’s a manager’s ethical responsibility to protect that trust.
If You’re Lucky
You’ll develop a culture where dissenting views are actively sought out and respectfully heard. Better decisions and ideas are born from this diversity. As are enthusiastic and effective implementations. And train wrecks and disasters avoided.
What do you do to hear diversity of thought?
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Chris Arlen
President, Service Performance
Technorati: communication, improvement, management
January 2nd, 2008
