Report: The State of Customer Experience Management, 2013

We just published a Temkin Group report, The State of CX Management, 2013. The research shows where large companies are along their customer experience journeys. Here’s the executive summary:

We surveyed more than 200 large companies and found an abundance of Customer Experience (CX) ambition and activity. Most companies have a CX executive leading the charge, significant CX activities being coordinated by a central team, and a staff of six to 10 full-time CX professionals. Using Temkin Group’s CX competency assessment, we found that only six percent of companies have reached the highest two levels of customer experience maturity as firms struggle the most to master Employee Engagement and Compelling Brand Values. When compared with CX Laggards, CX Leaders have stronger financial results, more CX ambition, more CX leadership, and they are more successful with their employee engagement efforts. Executives in companies with stronger CX competencies also focus more on delighting customers and less on cutting costs.

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Here are some of the findings from the research:

• While only eight percent of companies believe that they are leading their industries in CX today, 62% have goals to be the best within three years
• Sixty-one percent of respondents have a senior executive in charge of the company’s overall CX efforts and 71%  have a centralized CX group
• The median firm in our study has six to 10 full time CX employees
• Seven out of ten respondents identified “other competing priorities” as a significant obstacle to their CX efforts
• Only six percent of the companies that completed our CX Competency and Maturity Assessment have made it to the top two levels of maturity, Align and Embed
• We compared companies with leading CX efforts with other firms and found that they have better financial performance, more centralized CX activities, better employee engagement, stronger employee engagement, and more management attention to corporate culture

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The bottom line: Most companies remain in the early stages of CX maturity

Report: Employee Engagement Case Studies: Five I’s in Practice

We just published a Temkin Group report, Employee Engagement Case Studies: Five I’s in Practice. It’s a deep dive into how companies are systematically improving employee engagement. Here’s the executive summary:

Engaged employees create engaged customers, kicking off what Temkin Group describes as a virtuous cycle. More and more organizations are paying attention to the connection between employee engagement and customer experience through a variety of efforts spanning five areas that we call that Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve and Incent. We’ve compiled case studies of three organizations that are engaging employees and driving results: BMO Financial, Hampton brand, and Safelite AutoGlass.

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Here is an overview of how the three companies we examine are addressing the FIve I’s of Employee Engagement:

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The bottom line: Employee engagement is worth the effort of learning best practices

30% of U.S. Workers Have Practical Wisdom

In a previous post, I discussed a wonderful TED talk by Barry Schwartz called Our Loss of Wisdom. Schwartz references what Aristotle called “practical wisdom,” the combination of moral will and moral skill.

As an analyst at heart, I decided to quantify practical wisdom. How? By creating two statements that are indicative of moral will and another two that reflect moral skill.

• Moral will statements:
  • I have an obligation to help other people when I’m doing my job, even if it’s not part of my job description
  • I am willing to work harder or longer if my efforts will help other people
• Moral skill statements:
  • I regularly do things that aren’t on my job description because they will help other people
  • I understand when it’s appropriate to break my company’s rules in order to help customers and other people

In the recent Temkin Group consumer benchmark study, we asked more than 5,000 U.S. employees if they agreed with those four statements. As you can see in the chart below:

• More people agree with the moral will questions than the moral skill questions
• We classified people as having moral will or skill if they agreed with both of the related statements. Sixty-nine percent have moral will, but only 36% have moral skill
• When we looked at the combination of these skills, we found that 30% have practical wisdom—the combination of moral will and moral skill

I will continue to dig deeper into our dataset to understand the demographics and attitudes that go along with practical wisdom. So stay tuned.

The bottom line: When it comes to morality, there’s more will than skill

Two Thumbs Up For UK’s Engage For Success

I want to congratulate the UK government for understanding the power of employee engagement. In 2009, the Labour Government engaged David MacLeod and Nita Clarke to produce a research paper on the importance of engagement to the UK economy. Based on that study, the government backed the launch of the Engage for Success movement last November. In a video that was made for the voluntary movement, a young worker proclaims…

“…give employees a voice… create a place where people want to shine… I’m not a human resource; I’m a human being.”

Here are a few comments from the authors of the initial study and leaders of the movement:

• MacLeod: “We can show you places where the workforce has been reduced but levels of engagement have gone up. It’s because the challenge has been explained to the workforce, their ideas have been taken on board and there’s been a partnership. Anyone who says ‘we can’t do this because there’s a recession on’ just doesn’t understand what engagement is.”
• Clarke: ”If you’re not trying to improve engagement, you may as well be standing on top of a building chucking money away… “HR needs to be expert, they need to orchestrate how to find engagement in a transformational way… This is HR’s opportunity to be at the top table, to help the CEO and top team ensure people are behind their strategy.”

My take: I totally agree. Employee engagement is critical for an organization’s success, it represents an opportunity/imperative for HR to become more strategic, and it could even be a catalyst for improving the competitiveness of an entire country.

To achieve those benefits, however, the prevailing approach to management must change. Rather than imposing layers of strict controls over employees in an attempt to ensure financial success, companies need to engage employees and reap the benefits. While this may seem like a subtle difference, it leads to a profoundly different approach to management—from controlling to leading.

Employees aren’t a fungible commodity that you burn through on the way to success, they are your critical assets. Herb Kelleher, founder of Southwest Airlines, does a great job of describing his enlightened approach to employees:

“If you create an environment where the people truly participate, you don’t need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.”

The following chart, which is the initial figure in the Temkin Group report The Five I’s of Employee Engagement, highlights how employee engagement is the start to a virtuous cycle and showcases compelling data from our benchmark study of U.S. employees. As you can see, our research on U.S. employees concurs with MacLeod’s and Clarke’s findings.

Unfortunately, HR has not yet embraced employee engagement as a strategic imperative. In a recent Temkin Group study of HR professionals at large organizations, we found that 75% of HR professionals recognize that employee engagement is important, but only 61% rate their HR group as being good or excellent in this area. As you can see in the chart below, employee engagement has the second highest capability gap amongst the 14 areas we examined.

In our work with organizations, we rarely see HR organizations driving any serious employee engagement activities. HR groups are more focused on transactional activities such as hiring, firing, compensating, and training. Given the opportunity for creating value, it’s time for HR to take the lead in this critical area. As Clarke stated: “This is HR’s opportunity to be at the top table.”

The bottom line: Employee engagement is critical for organizations and for HR

Report: Best Practices in B2B Customer Experience

We just published a Temkin Group report, Best Practices in B2B Customer Experience. Here’s the executive summary:

Customer experience is gaining more attention within business-to-business (B2B) organizations. Rightfully so—customer experience drives loyalty with business customers. At the same time, clients and prospects, who increasingly compare business interactions with their personal consumer experiences, are raising the expectations of B2B relationships. While our research has shown that most B2Bs are still mastering the basics, our interviews with 28 companies uncovered best practices for building a more client-oriented mindset through closed-loop voice of the customer programs, customer journey maps, and virtual client advisory boards. Using the customer insights they collect, forward-thinking B2B organizations are becoming more client-centric in how they develop new business, create account plans, and proactively provide support (or intervene when service breakdowns occur). To sustain superior customer experience, B2B firms must master four competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness.

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The report identifies many best practices across two areas:

• Building a client-oriented mindset. Organizations have a natural tendency to operate from an internal perspective, focusing on the needs of their functional silos more than on their clients. To offset this tendency, B2B firms need to build repeatable and systematic processes for gathering, analyzing, and taking action on customer insights. The report identifies best practices in the following areas:
  • Develop Closed-Loop Voice of the Client (VoC) Programs. Having a reliable flow of customer insights across the organization is critical to driving customer-centric actions.
  • Use Journey Maps to Better Understand Clients’ Needs. To better understand how clients see their experiences, B2B organizations can use a tool known as customer journey mapping.
  • Tap Into Virtual Client Advisory Boards. Client advisory boards (CAB) and councils provide the opportunity to acquire more insight into customer needs and expectations.
• Building client-centric relationship management. Today, account management functions tend to be oriented around sales generation and firefighting. To build stronger, longer-term ties with clients, Temkin Group expects that B2B firms will head towards a more client-centric model of account management that uses client insights throughout the relationship management continuum. The report identifies best practices in the following areas:
  • Account-Level Experience Reporting. To acquire, retain, and grow B2B relationships, account managers need to understand what’s working and not working for each of their clients.
  • Insightful Business Development. B2B organizations that gather and use the right customer insights during this early stage will create a differentiated experience from the start of the relationship
  • Collaborative Account Planning. By taking a structured and collaborative approach to developing in-depth account plans, companies can tap into their enterprise knowledge.
  • Proactive Intervention and Support. B2B organizations need to use customer insights and feedback from account managers to intervene in service experiences gone wrong as quickly as possible with well-defined, robust recovery procedures.

The report provides a plethora of specific practices in these areas from companies such as Becker and Poliakoff, CDW, Cisco, Citrix, Dell, Enterasys, Equinix, Genworth Financial, Lithium, Lynden, Philadelphia Insurance Companies, Oracle, Salesforce.com, SanDisk, Stream Global, Verint, and VMware.

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The bottom line: B2B companies need more customer-centric enterprise relationships

 

American Airlines Needs More Than a New Paint Job

American Airlines recently announced a brand makeover, releasing its new logo and designs for its planes. According to CEO Tom Horton:

“Our new logo and the refreshed exterior of our planes represent more than a change of symbol, but a symbol of change in our path to modernize and innovate“

My take: The company spent millions of dollars on this veneer, but has yet to address its bigger brand issue: Customer experience. The airline can make whatever promises that it wants in its visual identity, but the lasting impressions of its brand are formed by the millions of interactions that customers have with American Airlines every day, whether it’s online, on the phone, at the airport, or in the air. Brands are formed not by the promises we make, but by the promises we keep.

To put American’s customer experience into perspective, it was the next to worst airline in the 2012 Temkin Experience Ratings (only slightly ahead of US Airways, the airline that it is planning to merge with) and rated 187th out of 206 organizations in the ratings. Making matters even worse, it was one of the few companies to show a decline from 2011 to 2012. While we won’t be releasing the 2013 Temkin Experience Ratings for a couple of weeks, I can tell you that American Airlines and US Airways have successfully defended their bottom spots in the airline industry.

Where should American Airlines focus its energy, if not a new logo and some fancy paint on the tail of its planes? Employees. One of the Six Laws of Customer Experience is that unengaged employees don’t create engaged customers. Until American finds a way to get employees on-board, then it will continue to deliver terrible experiences to customers. And there’s no amount of marketing and advertising spending that can make up for a bad experience.

As a vision of what might be possible in the long-term future, take a look at what Southwest Airlines does with employees. With that in mind, Horton and the rest of the American Airlines management team should immediately start focusing on what we call the Five Is of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent.

As a frequent flyer, I hope that American Airlines figures this out. An upcoming merger with US Airways will hopefully become a catalyst for making signifiant improvements in employee engagement (and ultimately customer experience). If not, this might just be a case of the bad getting bigger.

The bottom line: You can’t paint over poor customer experience

Employee Engagement Lessons From Southwest Airlines

It’s hard to discuss employee engagement without mentioning Southwest Airlines. Here’s how Southwest’s founder and former CEO Herb Kelleher once described his approach to management:

“If you create an environment where the people truly participate, you don’t need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.”

That’s not just an empty observation; it defines how Southwest Airlines has been built. I recently heard a presentation from Southwest and wanted to share some of the more interesting tidbits.

• 80% of Southwest’s employees are unionized, the largest of any airline.
  My take: That’s interesting, and provides a clear example that companies can engage unionized employees. It really hit home to me when I saw this great note from the pilot’s union to Kelleher when he retired.
• Each workgroup at Southwest is the highest paid in the industry.
  My take: The company can afford to do this because it takes advantage of what we call the Employee Engagement Virtuous Cycle. It turns out that companies with above average financial results tend to also have more engaged employees.
• After 9/11, Southwest was the only airline not to lay off people.
  My take: It actually sold off some planes instead. It’s easy to focus on employee engagement when things are going well, but the real demonstration of commitment comes when people are forced to make difficult trade-offs.
• To help keep the airline viable when gas prices spiked in 1991, employees voluntarily purchased fuel for the company via payroll deductions.
  My take: Employees that are treated as important participants in the business will go out of their way to help the company. Our analysis shows that employees who are inspired by their company’s mission are more likely to go out of their way to help.
• In May 1972, the company created the 10-minute plane turnaround.
  My take: This innovation was the response to a desperate situation where the company wanted to keep servicing the same number of routes although it had to cut back on the number of its planes. This critical innovation could never have been done by mandate, it took the full participation and involvement of Southwest’s employees.
• The company describes itself as having a servant’s head, a warrior’s spirit, and a fun LUVing attitude.
  My take: I really like this description. The head is about living the golden rule, the spirit is about doing whatever it takes, and the attitude is a play off of the company’s pervasive use of the term LUV, which is its stock ticker symbol as well. Southwest employees take their work seriously, but not themselves.
• If it can be done, I’ll do it.
  My take: That’s the positive attitude that Southwest employees are taught to have with customers. It’s a stark contrast to the “can’t do” attitude that shows up with employees at many other companies. That’s why Southwest is the easiest airline to do business with in the 2012 Temkin Experience Ratings. Interestingly, number two on the list is AirTran, the airline acquired by Southwest.
• We make deposits in the goodwill bank.
  My take: That’s another phrase I LUV. Everyone makes mistakes, but companies that build goodwill are often given a second (and third, fourth, fifth, etc.) chance. Southwest can count on a relatively high degree of goodwill, given it was right behind JetBlue in the 2012 Temkin Forgiveness Ratings.

The bottom line: Southwest Airlines shows it employees a lot of LUV

Report: Employee Engagement Benchmark Study, 2013

We just published a Temkin Group report, Employee Engagement Benchmark Study, 2013 that updates a similar study we completed last year. Here’s the executive summary:

Using the Temkin Employee Engagement Index, we analyzed employee engagement across more than 2,400 U.S. employees. Employee engagement has increased over last year. Companies that outperform their peers in financial performance and customer experience have considerably more engaged workforces. Why does that matter? Because highly engaged employees try harder, recommend the company, help others, and take less sick time. It turns out that services industries have the most engaged employees while the retail sector has the fewest. We also found that highly engaged employees tend to be: front-line employees, high-income earners, male, African-American, and happy. Since engaged employees are such a valuable asset, we recommend that companies focus on this area using our Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent.

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Here are some of the findings from the study:

• Engaged employees are more than twice as likely to stay late at work if something needs to be done, help someone at work even if they’re not asked, and do something that is good for the company even if it’s not expected of them.
• Engaged employees are almost three times as likely to make recommendations about an improvement and more than six times as likely to recommend that a friend or relative apply for a job.
• Fifty-seven percent of U.S. employees are moderately or highly engaged, an increase from 47% that we found last year.
• Three-quarters of employees in companies with significantly above average financial performance are moderately or highly engaged, compared with less than half of firms with subpar financial results.
• Nearly twice as many employees at companies with subpar customer experience are looking for a job compared with employees at companies with good customer experience.
• Professional services and construction companies have the highest level of employee engagement, while travel and retail firms have the lowest.
• Sixty percent of the workforce at companies with 100 or fewer employees are moderately or highly engaged, compared with only 46% at companies with 10,000 or more employees.
• Seventy-five percent of senior executives are moderately or highly engaged, compared with only 46% of individual contributors.
• The most engaged employees tend to be older, male, college educated, and African-American.
• The most engaged employees tend to be financially secure, healthy, physically fit, and typically happy.

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The bottom line: It’s time to focus on engaging your employees

P.S. Check out these recent related reports: The Five I’s of Employee Engagement and CX Needs More HR Focus on Employee Engagement

Report: The Four Customer Experience Core Competencies

Temkin Group just published an update to the report that defines one of our fundamental frameworks, The Four Customer Experience Core Competencies. This report lays out the building blocks for customer experience success. This topic is so important that we’re giving this report away for free. Here’s the executive summary:

Research shows that customer experience is highly correlated with loyalty. While any company can improve portions of its customer experience, it takes more than a few superficial changes to create lasting differentiation. Organizations that want to become customer experience leaders need to master four customer experience competencies: Purposeful Leadership, Employee Engagement, Compelling Brand Values, and Customer Connectedness. To gauge your progress, actively use Temkin Group’s Customer Experience Competency and Maturity Assessment. This assessment will identify areas of strength and weakness in your CX efforts as well as identify your progress along six stages of CX maturity: Ignore  Explore, Mobilize, Operationalize, Align, and Embed.

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Here’s how I describe the four CX Competencies:

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The bottom line: It’s time to improve your CX competencies

 

Report: Lessons in CX Excellence

We just published a Temkin Group report, Lessons in CX Excellence. This 127 page report provides a rich set of best practices and a glimpse into the customer experience efforts of 11 companies that were finalists in Temkin Group’s 2012 Customer Experience Excellence Awards. Here’s the executive summary:

The following 11 organizations are finalists in Temkin Group’s 2012 Customer Experience Excellence Awards: Blue Cross Blue Shield of Michigan, Bombardier Aerospace, Citrix, EMC, Fidelity Investments, JetBlue Airways, Microsoft, Oklahoma City Thunder, Oracle, Safelite AutoGlass, and Sovereign Assurance NZ. This document provides highlights of their customer experience efforts and best practices across the four customer experience competencies: Purposeful leadership, compelling brand values, employee engagement,  and customer connectedness. The report also includes the finalists’ detailed nomination forms.

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Here are excerpts of our description from each of the finalists:

• In just 17 months, Blue Cross Blue Shield of Michigan assembled its customer experience team and leveraged a variety of insights and data to devise a comprehensive strategy to “Find and Fix” near-term opportunities and “Transform” the organization to be customer-centric at its core.
• Bombardier Aerospace drives continuous improvement through its multi-faceted Amazing Customer Experience (ACE) initiative. Customer feedback is essential to ACE and is gathered through a variety of channels including surveys, customer forums, and Bombardier’s Executive Listening Program.
• Citrix places an emphasis on giving customers a voice in its product roadmap and building a user-centered culture in order to continuously improve its products, services, and experiences. Through the Design Matters initiative, Citrix helps its employees rethink core business processes with a focus on customer needs.
• EMC has a Total Customer Experience (TCE) program with a mission to enable business growth through improvements based on a customer-focused, data-driven strategy. The program provides ways for customers, partners, and EMC field personnel to provide feedback on their experiences, and measures customer quality in every interaction.
• Founded on the core value “The Customer Is Always First,” Fidelity Investments has a well-established, well-rounded program that delivers enterprise-wide results. The program is comprised of four integrated elements: Voice of Customer & Associate, End-to-End Process Improvement, Culture & Communications, and Measurement & Rewards.
• The Customer Insight (CI) team at JetBlue Airways provides the business with a multi-faceted view of its customers through feedback from surveys, text analytics, social media monitoring, and third party benchmarking. The CI team also has a program in place to address all unsolicited customer feedback that is received regardless of source through its Customer Retention Program.
• Microsoft believes that the better it is at building a culture of accountability, listening and responding to customers, simplifying offerings, and innovating based on customer feedback, the stronger its Customer and Partner Experience (CPE) will be.
• “Create Repeat Guests Profitably” is the mission of the Guest Relations team of the Oklahoma City Thunder. The team uses various fan feedback platforms to gather feedback including email, text message, telephone, written submissions, and social media, all of which are promoted on the team’s website and during in-game announcements.
• Oracle drives consistent customer experience activities across all regions and lines of business through a structured framework and standardized approach to monitoring the customer experience: Listen, Respond, Collaborate for Customer Success. The portfolio of feedback tools includes transactional and product surveys, relationship surveys, customer advisory boards, user experience labs, and independent user groups.
• On the company’s path back from bankruptcy, Safelite AutoGlass CEO Tom Feeney set a goal in 2008 to double business in four years by 1) putting Safelite’s people first by focusing on talent development and employee engagement and 2) going above and beyond to delight every customer.
• Sovereign Assurance of New Zealand’s strategy is to create customer engagement and advocacy through effortless experiences, with a program of initiatives around four key levers: customers front and center, stickier relationships, maximize touch points, and focus on value.

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The bottom line: There’s a lot to learn from these excellent CX efforts

Is Your Mission Inspiring Employees?

In Temkin Group’s recent consumer benchmark study, we asked a number of questions about how full-time employees view their employers. Using the dataset, I examined the effect of an organization’s mission. As you can see in the figure below, employees who are inspired by their employer’s mission are significantly more committed and productive.

It’s clear that an inspiring mission is an incredibly valuable asset. Here are some examples of missions from organizations that are capitalizing on this phenomena:

• Ritz-Carlton’s Credo:  The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.
• Southwest Airlines: The mission of Southwest Airlines is dedication to the highest quality of Customer Cervice delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.
• USAA: To facilitate the financial security of its members, associates and their families through provision of a full range of highly competitive financial products and services. In so doing, USAA seeks to be the provider of choice for the military community.
• Rackspace: Learn more about how we provide Fanatical Support to our customers, our work environment and the Rackers who make it special!
• San Diego Zoo: San Diego Zoo Global is a conservation, education, and recreation organization dedicated to the reproduction, protection, and exhibition of animals, plants, and their habitats.
• Mayo Clinic: To inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research.
• U.S. Navy SEALS: In times of war or uncertainty there is a special breed of warrior ready to answer our Nation’s call. A common man with uncommon desire to succeed. Forged by adversity, he stands alongside America’s finest special operations forces to serve his country, the American people, and protect their way of life. I am that man.
• Amazon.com: Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online. 
• Nike: To bring inspiration and innovation to every athlete in the world. If you have a body, you are an athlete.
• Google: Google’s mission is to organize the world’s information and make it universally accessible and useful.

Five Questions That Define An Inspiring Mission

Words alone are not what make a mission inspiring. Here are five things to keep in minds as you examine your organization’s mission:

1. Is it written? While the words are not what makes a mission, it needs to be written down so that it can be shared consistently across an organization.
2. Is it real? A mission statement is only valuable if it truly embodies the mission of the company, otherwise it’s just a collection of meaningless words. The leadership team needs to consistently make decisions that optimize the mission over other objectives.
3. Is it simple? If you want employees to understand the mission, then it needs to be easy enough for them to repeat it to others.
4. Does it connect with employees? Every employee in an organization should feel connected to the mission; they should be able to see how they help deliver it every day.
5. Will it create value? Missions must define the value that the organization intends to creates for customers or other key stakeholders.

The bottom line: An inspiring mission is a sustainable competitive advantage.

Why Do Middle Managers Obstruct CX Progress?

Customer experience transformation requires a lot of change. But organizations don’t change very easily. Every customer experience journey faces a myriad of resistance in support of the status quo. This isn’t new insight; take a look at some well-aged wisdom:

“Change does not roll in on the wheels of inevitability, but comes through continuous struggle.” -Martin Luter King, Jr.

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” -Niccolo Machiavelli

“Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.” -John Kenneth Galbraith

While change is a struggle, it seems to be particularly difficult within one strata of the organization, middle managers. As you can see in the chart below with feedback from 249 large companies, middle managers are the weak link in customer experience efforts, a problem that worsens in larger companies. While front-line employees are seen as the most supportive of change, their supervisors and managers appear to be the largest obstacles. What’s going on here?

This is not an issue with middle managers, but with the environment in which they work. What turns middle managers into the key barrier to improved customer experience?

It comes down to the 5th law of The Six Laws of Customer Experience: employees do what is measured, incented, and celebrated. When change happens, middle managers get caught in between the aspirations for the future and the structures of the past.

Why does this situation affect middle managers the most? Senior leaders can embrace change quite easily by proclaiming what they want, which only takes a few changes to Powerpoint and a handful of meetings and emails. Front-line employees understand what customers are going through, so they are easy to get on-board with changes that will help. But middle managers don’t have that luxury. Even if they completely buy into the change, middle managers get stuck with delivering on the sales, productivity, and profitability measurements in the current plan.

Leaders may say they want change, but they don’t abandon existing business goals. This leaves middle managers operating in an environment where they get pushed to change how their people operate, but they get penalized when they don’t meet historical goals. Most of the measurements, incentives, and celebrations support the old way of working — and middle managers are the most held accountable for them.

For customer experience transformation to succeed, companies must overcome this middle-manager blockade. Here are some ideas:

• Form a middle manager task force, letting them voice their issues and help identify solutions
• Build a CX advocate/ambassador program and include some middle managers, this will give them a voice outside of their formal reporting structures
• Relieve some of their existing goals, giving middle managers bandwidth and motivation to focus on the new direction
• Celebrate middle managers who are making the change, focusing on their advocacy of the new direction
• Discuss middle managers in executive meetings, hopefully raising empathy for their situation
• Make middle mangers a priority as you focus on the Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent.

The bottom line: Don’t hate the middle managers, hate the game

Why Staples Refuses to Sell Computers to Customers

Why do some Staples employees refuse to sell computers to customers who don’t want to buy warrantees? That’s right, it appears that Staple’s employees use what they call “walking the customer” out of the store if they aren’t willing to buy a warrantee or other extras with a computer.

Shall we blame the employees? No! As I describe in The Six Laws of Customer Experience: employees do what is measured, incented, and celebrated. This is a breakdown of the system, not the people.

When a situation like this happens, leaders need to ask themselves: what are we doing that is causing this type of behavior? In this case with Staples, the behavior seems to be driven by a goal for each store to have an average of $200 of add-ons (including warrantees) for every computer that it sells. This goal puts pressure on store managers and employees that translates to pressure on customers and, at least occasionally, to a downright refusal to sell computers.

Here’s what the New York Times uncovered from Staples employees:

The average needs to be $200. In other words, each time you sell a computer, you need to sell, on average, $200 worth of other stuff. And that average is carefully tracked. Sales staffers who aren’t meeting their goals are coached, and if that doesn’t work, she and other employees said, there will be disciplinary action that can lead up to termination; underperformers can also end up with lots of night and weekends shifts or even a reduction in scheduled hours.

Unfortunately this situation is not uncommon. I was recently at an Enterprise Rental Car where an employee kept trying to sell me additional insurance. After I rebutted his first few offers, he got more and more ornery about it and kept trying to make me feel like an idiot for not taking the insurance (which I knew that I did not need). I’m pretty confident that his behavior was driven by some sales incentive/program.

Companies often create goals that make perfect sense at corporate headquarters. $200 per computer or an increase in car insurance probably generates nice looking numbers in a spreadsheet. Why not set it as a goal? Why not hold managers and employees accountable? It’s great for our bottom line and it seems so reasonable…

What’s missing from the equation is an understanding of the environment that these decisions create. Every incentive or goal that you place on an employee must interact with every thing else you want them to do. When you overemphasize a goal (like $200 per computer), then you are asking  the organization (maybe not explicitly, but quite adamantly) that it should forget about some other goals and focus on this one. If it’s hard to sell $200 of extras per computer, then the organization figures out how to reach the goal by not selling computers if the customer doesn’t want a warrantee.

Staples and Enterprise Rental Car are pretty well run companies. They just forgot the 5th rule of customer experience…

Employees do what is measured, incented, and celebrated.

The bottom line: Make it easy for employees to do the right thing

Report: The Five I’s of Employee Engagement

We just published a Temkin Group report, The Five I’s of Employee Engagement. While previous Temkin Group research found a strong connection between employee engagement and both productivity and customer experience, only 35% of large firms’ employee engagement efforts received strong ratings. Here’s the executive summary:

Despite the compelling upside to employee engagement, many companies neglect this key area, leaving employees much less than fully engaged. Our research uncovered 25 best practices across what we call the Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent. Among these practices are Symantec’s Customer First News, an online customer experience update “broadcast” for employees, Sprint’s “day in the life of the frontline” experience bringing senior leaders together with call center and retail employees in their locations, Disney Store’s e-learning modules that develop both retail and entertainment skills in cast members, Fidelity Investments’ Voice of the Customer Ambassador program, and BKD’s Hi5 peer recognition campaign. CX professionals cannot drive employee engagement on their own; it requires support from across the organization. We’ve identified some areas for CX to start collaborating with HR.

Download report for $195

Based on interviews with over 20 companies, this report identifies 25 best practices and highlights more than 60 examples of ways in which companies are engaging employees across the Five I’s. There are 13 exhibits providing additional information on a number of the leading practices highlighted in the report.

Here are the 25 best practices across the Five Is of Employee Engagement:

Aimee Lucas, Customer Experience Analyst at Temkin Group, has prepared a brief introduction to the research and findings that you can view:

Download report for $195

The bottom line: The 5Is can improve your customer experience and business results

SimplexGrinnell’s NICE Workshops Engage Employees in VoC

I often speak with Karl Sharicz, Manager of Customer Experience at SimplexGrinnell (a Tyco Company), because he’s a very active board member of the Customer Experience Professionals Association. During one of our recent conversations he gave me an update on the company’s NICE workshops, interactive sessions where local offices review customer verbatims and develop action plans. It’s a great practice that other companies may want to “borrow” so I pulled together this post.

Here’s an overview of the Next Improvement in Customer Experience (NICE) Workshop program:

• It’s a highly focused 5-hour interactive on-site session for key district personnel (managers, admin, and front-line) to develop an action plan for improving their customer experience with district service delivery.
• In small teams, workshop attendees are exposed to their district CSAT metrics and customer verbatim comments drawn from 80 to 100 of their customers that were surveyed over the past 12 months.
• Using that customer feedback, they identify and agree upon their most prevalent service delivery challenges. They brainstorm new and best service practices to implement within the next 30 days that will begin to make an impact on customer satisfaction (and NPS scores) within the next 90 days.
• Implementation details:
  • A high-potential district employee is selected as a Customer Champion and is trained to become a workshop facilitator. All facilitators must have attended a NICE Facilitator Training session. A member of the Customer Experience team participates remotely in each workshop via phone and will serve as the “subject matter expert” in case any questions cannot be addressed by the local facilitator.
  • The district selects up to 18 workshop attendees (maximum) from among inspectors, technicians, service supervisors, dispatchers, project managers, contract administrators, construction managers, etc.
  • The primary deliverable from the ½-day NICE workshop is a list of 15-20 potential action items aimed at improving service delivery. Those potential actions will be further refined over the next 30 days to select 3 to 5 actions or service process improvements that the district can immediately implement that will begin to change customers perceptions on services delivered by the district.
  • These workshops should be conducted each year at or near the anniversary date of the original workshop—based on customer survey data for that district collected over the previous 12 months. This ensures sustainability.

Karl was nice enough to answer a series of questions:

To begin with, how would you describe your role?