Dumb Luck and Employee Happiness-One Works and the Other Doesn’t?

April 14, 2009 By 2 Comments

Every once in awhile, my second favorite publication, Harvard Business Review, serves up some fascinating content that leaves me scratching my head and wondering. The April, 2009 issue doesn’t disappoint, offering a couple of interesting but potentially pointless studies in the Forethought section.

One asks: “Are Great Companies Just Lucky?” and the other serves up, “Employee Happiness Isn’t Enough to Satisfy Customers.”

Both articles offer up some interesting premises and are backed by well-pedigreed professionals that seem to have conducted a fair amount of research to conclude that luck is important and employee happiness is not the silver bullet of customer satisfaction.

My reactions range from, “OK, and the point is…?” to “Huh?”

Let’s tackle the article on corporate luck first. The premise is that the “great” companies singled out in studies like In Search of Excellence and Good to Great are actually not great, but lucky.

The authors suggest that “a firm is remarkable only when its performance is so unlikely that systemic variation (random nature) alone cannot account for its results.” They describe an example of students in a class flipping coins, with those that draw tails sitting down while those drawing heads remain standing. At the end of seven rounds, the sole remaining student is declared “great” for having flipped and drawn heads seven times in a row. In reality of course, he was lucky, not great and it’s unlikely that anything that he did resulted in his favorable outcome.

The authors describe their research methodology which ultimately evaluates “287 allegedly high-performing companies in 13 major success studies.” Their final conclusion: only one in four of those companies was actually remarkable. “The rest were indistinguishable from mediocre firms catching lucky breaks.”

Art’s Comments:

Maybe the authors are giving Jim Collins a little heartburn with this article, however, it’s an awful lot of razzle dazzle to go through to tell us that we should not take success stories literally and attempt to apply them verbatim to our own work environments. And I don’t know about you, but somehow the notion that these researchers quantified “luck” and were able to ascribe accomplishments to “lucky breaks” is making my head hurt just a little bit.

And You Define “Employee Happiness” How?

The second study focuses on establishing or disproving a correlation between happy employees and customer satisfaction. The authors highlight their own survey results that “failed to confirm that service businesses with more-contented staff also have more satisfied customers.” Interestingly, at two firms, they highlight finding a negative correlation. “We observed that factors that increased customer satisfaction decreased employee happiness.” Huh?

Art’s Comments:

Aside from the “Huh?” above, between the study on “luck” and this one, I find myself wondering whether it was a tough news month at HBR. Both stories make me rather irreverently suggest that everyone that conducts these studies should spend a few decades actually working in corporations before they are allowed to study them.

We don’t have the benefit of seeing the questions in the latter article, but it doesn’t’ take too much of a leap to imagine that if “employee happiness” was improperly defined it would be fairly easy to connect doing more work to a reduction in the “happiness” quotient. Also, the reliance on companies that have earned “Best Places to Work” awards and then showcasing their lousy results, shows a profound naivete about the veracity of those workplace surveys. They are typically crap put together by groups in pursuit of p.r. accolades.

For the sake of my own study in over two decades of leading, when employee happiness includes being treated with respect, supported for development, receiving honest, timely feedback and being given challenging assignments, then I guarantee that there is a positive correlation with customer satisfaction.

The Bottom-Line for Now.

I usually look to HBR for sage guidance and provocative insights. These articles feel a bit like tabloid journalism backed with pointless research and ending in useless conclusions. Let’s hope next month’s issue is back on track.

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Filed Under: Leadership, Performance Tagged With: , , , , , , , , , , , , ,

The Last Yard: AT&T’s Failure to Fully Satisfy in Spite of A Competition Killing Product

December 28, 2008 By 2 Comments

I suspect from the crowd at the Crystal Lake, IL AT&T store on the day after Christmas, that I was not the only person in America that had decided to surprise someone in their family with a new Apple 3G iPhone.  While I cannot be certain what it was like at the Verizon store where they do not carry the iPhone, the AT&T location was filled with people seeking to port their numbers and accounts over to this exclusive provider for the iPhone.

Before I get too far, my issue and our learning opportunities come from AT&T’s System for on-boarding new customers with the iPhone.  The store team on the ground in Crystal Lake was great throughout the entire process.

My issue is more with AT&T’s seemingly incomplete and poor system (not the store’s) for helping customers ramp up on this season’s ultimate killer product.

Here’s a quick synopsis of what it took.

  • I started the process of acquiring a new iPhone for my college-age son a few weeks ago.  I use AT&T in my business, but the family was with the other guys.  I needed to find out how I could add a phone and deal with the texting, internet and voice needs of a serial texter.  I called AT&T and spoke with 2 reps who were completely incapable of confidently telling me what my options were and what the final costs would be to add a second line, switch to family talk and meet my son’s specs for usage.  Time investment…approximately one hour and no satisfaction whatsoever.
  • I tried the website.  Same result…no luck.  I defy anyone to pull off this simple transaction using their website.  Also, on this prime shopping day during prime daytime hours, the site was down for quite awhile undergoing maintenance.  Hmmm.  I wonder who scheduled that event?
  • I went to the store in Crystal Lake, IL and 45 minutes later I walked out with a new iPhone and Brett’s assurance that I could bring it back after Christmas to port my son’s Verizon number and move all of his contacts.  I also had the 800 number for the AT&T porting service in case I wanted to try that on my own.  Outstanding!  Score one for dealing with real live people face to face.
  • Christmas Day…the iPhone was a huge hit and a total surprise.  My wife and I had resorted to a little bit of Christmas present cruelty by just mumbling and groaning something about contracts every time my son raised the question of whether there was an iPhone in his future.  OK, it was mean, but the kid is tough, the world is not always kind, and it sure heightened his surprise!
  • Christmas Day again.  I wondered whether AT&T was aggressive enough to have people standing by to help their many, many new customers activate their freshly unwrapped products and start the meter running for billing purposes.  No such luck.  The recorded message indicated that they were closed for the day.  (OK, I feel a bit Scrooge-like here, but if I have a killer product like the iPhone and my success is a function of getting people smiling and dialing or texting as quickly as possible, I might have taken a different path on the holiday.)
  • December 26.  I power-dialed the 800 number at AT&T, put the speakerphone on and wrote a blog post, answered e-mail and reviewed the latest draft of a presentation.  After one hour and twenty minutes of being on-hold, I gave up. The next step was the store.
  • We were early, and got right up to the counter.  Another helpful Rep efficiently ported over my son’s 245 contacts from the Verizon phone (big score!) and then started the phone number port process.  The dedicated line for store reps must have been slammed.  He was on hold for 34 minutes before anyone answered.  During this time, the store filled, the line grew and everyone was after the same thing.  The family next to us had a shopping bag filled with iPhones needing numbers.  Before long, every rep in the store was on the phone and customer service ground to a halt.
  • Truth be told, once our rep was connected with someone on the AT&T side, the port was carried out smoothly and we were quickly on our way.  Probably not a moment too soon, as the people in line were getting a little feisty as the reps continued to be stuck on hold waiting for help.

My Points:

Again, this is not one of those 8 hours on the tarmac with no food or water and the toilets clogged, stories that the airlines are so good at creating.  And yet from this experience, I can’t help but think that AT&T doesn’t get it.

  • Any opportunity to capture a competitor’s subscribers must be a huge opportunity for the phone companies.  There has to be a natural motivation to create happy new customers.  All of those Verizon converts are viable prospects for internet, cable and any of the other products that they come up with to slowly bleed consumers dry.  The iPhone is the killer-app for converting customers, and its star power may not last forever.
  • The iPhone is a resonator…(Tuned In).  It is truly a remarkable device that practically sells itself.   And while the device offers a remarkable experience (not necessarily for the phone portion), AT&T missed the chapter on creating remarkable customer experiences.
  • If you are AT&T, what chucklehead decided that it was OK to staff the call center with a Rep level that had customers waiting for hours on the phone or almost an hour in-store to get their new products up and running? Someone somewhere focused on costs, kept the staff lean and forgot that they were in the business of creating great customer experiences.  And oh yeah, I would have had people working on Christmas Day to help satisfy their overwhelming urge to use this great new product.

The Bottom-Line:

Thanks to the team in Crystal Lake for helping us out so effectively, and thanks to Apple for such a great product.  As for you AT&T, I can think of other industries and companies that are disappearing because they failed to execute on the last yard.  Any leader or any company that is arrogant and complacent about taking care of customers is likely not a good long-term bet.  Perhaps they will figure out the “system” to satisfy customers with the next killer product that comes along once in a lifetime.

Filed Under: Marketing Tagged With: , , , , , , , , , , , , , , , ,

“If I had asked customers what they wanted, they would have said faster horses.”

October 2, 2008 By 1 Comment

Students of business history might recognize the quote above as coming from Henry Ford, the founder of Ford Motor Company and one of the early management innovators.  Mr. Ford’s quote raises a profound issue of when and how to listen to customers, or perhaps the more challenging flip side: when not to listen to customers.

The notion of not asking customers what they want and responding directly to their needs may seem like heresy to those individuals and organizations consumed with improving customer satisfaction and creating customer loyalty.  In fact, you should always listen and importantly, observe.  The real art in this process is understanding what customers really need, what problems they really would like to solve and what approaches and experiences that you can create that can surprise and delight them.

Harvard Professor, Clayton Christensen, seized upon this issue in his Innovator’s Dilemma/Innovator’s Solution books, where he suggests that a well-intentioned business may do everything right by listening and responding to customer requests, and ultimately fail as disruptive offerings upset the status quo.  

In my own work in the technology space over the past two decades, it is easy to look back at product development cycles driven by a never-ending desire to cram in customer-driven features, without a good understanding of why those features were needed and whether they were solving key problems or attacking symptoms.  It always felt like we were doing the right thing, but in hindsight, it was blind marketing. As Product Management systems improved and requirements development received more scrutiny, this situation improved.  Nonetheless, it is hard to see how the forest is changing when you are staring so intently at the trees. 

Christensen’s classic scenario is the company that dutifully enhances its offerings based on client input, ultimately creating bloated offerings with capabilities far exceeding what might be required of many or any buyers.  In the interim, a disruptive offering…something perhaps with fewer features and priced much lower (not always the case) can easily swoop in and…well, disrupt the market.  In essence, the well-managed, well-intentioned company created a vacuum that was filled by someone who understood the essence of the client’s problems…not just the features they were asking for.  (Think “Faster Horses” versus a new mode of transportation.)

The authors of the recent book, Tuned In, tackle this important topic by suggesting that a firm focus on developing Resonators, products or services that practically sell themselves.  Their six step process for creating a resonator and for Tuning In is in my opinion, a framework for avoiding the Innovator’s Dilemma that Christensen warns us about.

The design firm Ideo in their famous Deep Dive segment on ABC News showcase a process for design innovation that is what you might imagine a sociological dig would look like, as they follow and observe the various “buyers” of shopping carts in pursuit of understanding how this classic device could be grossly improved to better solve real problems.  While there is a fair amount of criticism of the “made for TV” nature of this episode, it offers some classic lessons in looking and observing to identify significant and perhaps even disruptive improvements.  Just asking a store manager or a customer about what they would like to see improved in their shopping cart may be insufficient for identifying what a shopping cart might actually be able to do.  Think cell phones and the iphone. 

The Bottom Line for Now:

My message here is intended as a cautionary tale.  It is good and right and noble to pursue increasing levels of customer satisfaction in your framework for operational excellence.  However, it is also easy to be misled by false signals, and sometimes those signals come from your customers.  Remember, they know you in a narrow context, so when they engage with you to talk about improving the Widgets that you make, they are thinking about you only as the Widget Company and as users of your widgets.  Their context is to give you ideas to improve your widgets. Just remember that it is quite possible that they don’t need a better widget or a faster horse. 

You need to build the institutional intelligence, the systems and of course the talent that truly focuses on understanding the unstated needs of buyers.  Of course, once you understand this, the real work of meeting and exceeding those needs as an organization begins. 

Filed Under: Decision-Making, Marketing, Product Management, Strategy Tagged With: , , , , , , , , , , , , ,