Words Of Wisdom On The 4th Of July

For those of you who celebrate it… Happy 4th of July!

Given the holiday in the US, I’m turning to insight from one of our founding fathers, Benjamin Franklin, who said

“All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we often make troublesome changes without amendment, and frequently for the worse.”

These words should provide a wake-up call to executives that underestimate the value  of customer loyalty. Firms that consistently deliver better customer experiences end up with more loyal customers. But in a recent Temkin Group study, we found that only 17% of respondents believe that their executives regularly support decisions to trade off short-term financial results for longer-term customer loyalty.

The bottom line: Treat customer loyalty as a critical business metric

Off Topic: Lessons From My Dad

My dad, Noah Temkin, passed away this past Friday after a drawn-out battle with Alzheimer’s. Rather than dwell on my sadness (which he would absolutely hate), I decided to list some of the many lessons that I have learned from his life:

• Always help others. My dad was active in many activities, from the University of Rhode Island to his high school reunion class, to the Jewish Community Center, to the Bridge Club Of RI, to the Paraplegic Association Of RI… and the list goes on. He became a leader in almost every group he joined because of his unflappable desire to help others.
• Make sure to laugh. My dad loved to joke and have fun; he was playful. Even when he was teaching me a lesson, it was often accented with some humor. Many times he’d tell me that I did something wrong by saying “why is it that there are more horses asses than there are horses.”
• Keep the odds in your favor. My dad was an incredible card player; Bridge, Poker, Gin Rummy… whatever. He actually supported our family playing poker poker when I was born. He taught me to get out of losing hands and keep the bluffing to a minimum – so that it remains a credible option. His approach was simple: lose small, but win big.
• Live life to the fullest. My dad loved life. His enthusiasm was infectious and he alway found a way to have good time. He refused to let even Alzheimer’s keep him down.
• Stay true to who you are. My dad was always the same guy. It didn’t matter who he was dealing with, you knew what you were getting. Even up until the very end, my dad was joking around and demonstrating his deep caring for his family and friends.

If you’re interested, here’s the eulogy that I delivered at his funeral.

Dad, rest in peace.

Words Of Wisdom On The 4th Of July

Since it’s the 4th of July, I want to wish everyone who is celebrating the holiday a…

Happy

Independence

Day!!!

In honor of the holiday, I decided to look back at some insights from a couple of our founding fathers.

Let’s start with a quote from John Hancock:

There’s only so many priorities that you can fund. What you choose to target, you need to win.

Here’s a quote from Samuel Adams:

Mankind are governed more by their feelings than by reason

My take: John Hancock points to an important concept — focus — which is something I spoke about in a post about Mayor Booker from Newark, NJ and in a post called Leadership Lesson: Less Is Better.

Samuel Adams’ quote talks about the need for empathy, which is critical when dealing with customers and employees. This quote from the Cleveland Clinic captures the essence of how to think about your customer interactions: ”The patient is not only an illness, he has a soul.”

When it comes to employees, this is a clear call for companies to focus on their corporate culture, which is why the first management imperative listed in my free eBook is ”Invest In Culture As A Corporate Asset.” 

The bottom line: Enjoy your 4th of July!

Learning From The Good Fortune Advice Of Others

Fortune Magazine asked 25 accomplished people about the best advice that they were ever given; it’s worth reading. I picked out 8 pieces of advice that I thought were particularly relevant to customer experience efforts. Here they are, with my comments:

1. “Focus on those things you do better than others.”
   Peter G. Peterson, Co-founder and Senior Chairman, Blackstone Group
   My take: You need to understand what makes your company special in the eyes of your customers; and it should show up in everything you do and every decision that you make. This fundamental premise is captured really well in a couple of older Harvard Business Review articles (that later became books): The Core Competence of the Corporation and  Customer Intimacy and Other Value Disciplines.
2. “Good story, but it’s hard to look smart with bad numbers.”
   Mark Hurd, Chairman and CEO, Hewlett-Packard
   My take: It’s hard to convince business leaders to make an investment in customer experience if you use bad or superficial numbers in your analysis. So spend time with the finance department and other internal financial analysts to make sure your business case is solid.
3. “Whatever anybody says or does, assume positive intent.”
   Indra Nooyi, Chairman and CEO, Pepsico
   My take: It’s official; I’m joining the Indra Nooyi fan club. This Fortune article and her description in Time Magazine shows that she has a great sense of leadership. All too often, burdensome processes are put in place to keep customers from defrauding the company or to keep employees “in line.” Using Nooyi’s advice, you can simplify many processes by assuming that most customers are honest and that most employees want to do what’s right.
4. “If I waited for you to turn, you and the defensive player would have an equal chance to get the ball. Your opportunity is gone.”
   Eddie Lampert, Chairman and CEO, ESL Investments; Chairman, Sears Holdings
   My take: You need to think several steps ahead, like a chess player, in every strategy that you are considering; factoring in the response by customers and by competitors.  This reminds me of a quote from Wayne Gretsky when he was asked what made him a great hockey player: “Other people skate to where the puck is, and I skate to where it is going to be.”
5. “To thine own self be true.”
   Bob Iger, President and CEO, Walt Disney
   My take: This is a key message at a personal level, but it also has meaning for companies. Organizations need to continually foster their key purpose, or they will lose site of who they are. That’s clearly part of the problem that Starbucks is facing today. This advice is also useful when thinking about your marketing efforts; don’ t try and portray your company as something it’s not; that’ll just lead to empty promises.
6. “Get sales up, and keep expenses down.”
   Nelson Peltz, CEO, Trian Fund Management
   My take: Promoting customer experience for the sake of customer experience is not a sustainable approach.  At the end of the day, you need to make the clear economic case that customer experience efforts will improve business results. If not, they’ll get displaced by other initiatives that have a clear economic benefit.
7. “Spend a ton of time with your customers. Especially when you’re new, the first thing you should do is go out to customers and ask them how you compare with competitors, how your service is, what they think of your products.”
   Charlene Begley, President and CEO, GE Enterprise Solutions
   My take: There’s nothing more powerful or aligning than clearly hearing the voice of the customer. All too often people put their own spin on what customers need or want, so it’s important that you hear what customers are saying in their own voices. But don’t listen though a starry-eyed lens, make sure you hear the reality of the situation. As I learned from Jack Welch: “Deal with the world as it is, not how you’d like it to be.”
8. “Have a point of view about the future that focuses on the customer.”
   Alan Mulally, President and CEO, Ford Motor Company
   My take: While companies often have visions, many aren’t in the right form. Start with a picture of where your customers will be and make sure that your vision is described through their eyes. If you can’t articulate what customers you’ll serve and describe what they’ll want, then you can’t hope for anything more than an empty vision.

The bottom line: When it comes to good advice, borrowing is a virtue.

Sometimes Good Is Better Than Brilliant

Have you ever heard of VF Corporation? Well, I hadn’t heard of the company until I read an article in Fortune magazine called How a 100-year-old apparel firm changed course. It turns out that VF owns a bunch of familiar brands like Vans, Lee, Wrangler, Nautica, Eastpak, Reef, and The North Face. The article talks about how VF converted its strategy to focus on “lifestyle brands” that appeal to consumers’ desires for fashion and status.

While discussing how the company shifted its strategy, Mackey McDonald, Chairman of VF Corp, provided this fantastic insight:

We realized we didn’t have to come up with brilliant ideas – we needed brilliant ways of executing good ideas.

My take: Very well said! I expect to be repeating this quote a lot in the future. It captures two concepts that I think are important:

1. You often get the most bang from your buck (or ROI on your effort) if you figure out what is “good enough.” (The 80/20 rule)
2. You should focus your efforts on things that you can actually implement.

The bottom line: Hopefully you found this post to be good, or at least brilliant.

Amex CEO Gains Insights From Napoleon

I was reading USA Today yesterday and ran across an interview with American Express CEO Kenneth Chenault. I really enjoyed his response when asked to characterize leaders who do well:

The best definition of leadership to me is summed up in a quote: “The role of the leader is to define reality and give hope” – by Napoleon.

(No need to harass Chenault about his management style, he goes on to say that he does not want to end up like Napoleon).

My take: You may not like what Napoleon did, but it is hard to deny that he was a great leader. His quote really does define the essence of leadership. It nicely captures many of the characteristics that I think are critical for good leaders:

• Deal with the reality of the world. I’ve always loved Jack Welch’s quote: “Deal with the world as it is, not how you’d like it to be.” Many executives think they can impose their will on the rest of the world. Unfortunatley, this makes it very difficult for the people who work for them who must operate within the constraints of the real world.
• Engage your employees. Walt Disney really understood the importance of motivating the people in his organization. He captured it well in this quote: “You can design and create, and build the most wonderful place in the world. But it takes people to make the dream a reality.” 
• Provide a clear vision. Leaders are involved in only a small fraction of the decisions within their organizations. So they need to make sure that the myriad of other decisions will collectively drive the organization in the right direction. They can’t be wishy-washy. As Newark’s Mayor Booker said: “Life is about focus. What you focus on, you become. If you focus on nothing, you become nothing.” If people know where they are going, they are more likely to get there.
• Maintain a sense of purpose. It’s not good enough just to have a vision; leaders needs to make sure that their organizations have a strong sense of purpose. And it needs to be clear to their employees and customers. As Howard Shultz, founder and Chairman of Starbucks, has been quoted as saying: “Customers must recognize that you stand for something.“

The bottom line: While Napoleon’s quote is a great guidepost for leaders, I don’t condone adopting his practice of resolving conflicts with a coup d’état.

Words Of Wisdom: Morpheus On Experience-Based Differentiation

Our research continually finds executives saying that customer experience is very important or critical. But most firms don’t have a very disciplined approach to it. Why is that? While this is a tough question for us mere mortals, Morpheus provided great insight on the topic when he said (in The Matrix):

“Sooner or later you’re going to realize, just as I did, there’s a difference between knowing the path and walking the path”

The bottom line: Morpheus is one cool hombre! Follow his advice and walk the the path towards Experience-Based Differentiation in 2008.

Words Of Wisdom: Colin Powell On Customer-Centric DNA

Colin Powell has been quoted as saying…

If you are going to achieve excellence in big things, you develop the habit in little matters. Excellence is not an exception, it is a prevailing attitude. 

My take: General Powell’s quote provides the key rationale for developing a customer-centric DNA. While firms may be able to craft discrete instances of good customer experiences, they need to develop the habit of meeting customer needs in the ”little matters” — the myriad of touchpoints with customers. And a company can NOT develop the habit of great customer experience without addressing the underlying processes and culture of the firm.

The bottom line: Customer-centric DNA exists when customer experience excellence is a prevailing attitude.

Four Management Styles: Are You Psychotic?

I sometimes incorporate quotes in my blog from different sources that I think are insightful. So I decided to mashup two of them — one from Jack Welch and another from Howard Schultz. Interestingly, they combine nicely to describe different management styles…

Four Unique Management Styles

The bottom line: Are you the type of executive that you’d like to be?

Words Of Wisdom: Walt Disney On EBD

One of the key principles of Experience-Based Differentiation (EBD) is: Make customer experience a discipline. When I talk about that principle, I always tell organizations that they need to engage employees in the process. Why? Because your employees can make or break any experience.

Walt Disney captured this extremely well in this quote that I ran across:

 

You can design and create, and build the most wonderful place in the world. But it takes people to make the dream a reality.

The bottom line: When it comes to your people, don’t mouse around.

Customer Experience Leadership: The Holy Grail

With so many people saying that customer experience is very important, why doesn’t it improve significantly? This venn diagram explains one key problem…

Not enough execs are fully commited and involved

The bottom line: More execs need to walk the customer experience talk.

Words Of Wisdom: Babe Ruth On Customer-Centric DNA

Given the excitement around the World Series, it seems fitting to turn to a quote from Babe Ruth…

(from mlb.com)

“The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.”

My take: Who knew that the Babe was a management guru?!? He was clearly foreshadowing the 3rd principle of Experience-Based Differentiation: Treat customer experience as a discipline, not a function.

I am starting to see more companies ask me how to develop a customer-centric DNA. That’s a great sign. It means that firms recognize that improving customer experience requires an enterprise-wide effort, not just some changes by a few front-line employees (see my post: My Manifesto: Great Customer Experience Is Free).

In a Forrester report that I wrote in March 2005 called The Customer Experience Value Chain, I said that Customer-Centric DNA consists of two elements:

• Customer familiarity. Databases and spreadsheets don’t buy things – people do. That’s why firms must go beyond analytics to understand their target customers. A good practice: Use field research to observe how users engage with channels like Web sites, kiosks, or stores – asking probing questions to uncover what users are trying to do, how they’re trying to do it, and what they’re thinking about during the process.
• Organizational engagement. Since internal alignment remains a critical challenge to improving customer experience, firms can’t just rely on the nebulous notion of “executive buy-in.” To create the change necessary across the company, firms need to engage in company-wide efforts that demonstrate a clear commitment to serving customer needs.

I think that is still a good way to think about Customer-Centric DNA.

The bottom line: Sometimes insight really does come out of the mouth of Babes.

Words Of Wisdom: Mayor Booker On Focus

I was reading the New York Times this past Wednesday and ran across a front page article called In Newark, the Mayor’s Crusade Gets Personal. It’s a great story about how Mayor Cory Booker of Newark finds time to be a “big brother to three young men from some of the toughest streets.” In the article, he’s quoted as saying to one of the boys:

Life is about focus. What you focus on, you become. If you focus on nothing, you become nothing.

If he wasn’t a mayor, he could have been a management consultant. His words are as powerful in a corporate setting as I hope they are for the boys that he mentors.

My take: To master Experience-Based Differentiation , firms need a lot of focus. They need to hone in on target markets; they need to design experiences for specific behavioral-based segments (see this post: Words Of Wisdom: Stanley Marcus On Customers As People); they need to identify the key elements of their brand (see this post: Firms Need Some Soul Searching) ; and they need to consistently set priorities based on all of those areas of focus.

But, all too frequently, firms don’t have the discipline to get that focused. The firms that attempt to do all things for all people, end up serving no-one particularly well.

The bottom line: Focus, focus, focus!

Firms Need Some Soul Searching

Let me start with an observation: most organizations have lost their souls.

Don’t worry, I’m not going to go on a diatribe about Satan or religious redemption. What I mean is that most organizations don’t know what they stand for — they’ve benchmarked themselves into cookie-cutter imitations of all their competitors. It’s really hard to tell the actual difference between banks or retailers or airlines or whatever. Firms try to use marketing gimmicks to fool customers into believing that there’s a real difference. And some more advanced firms use micro-segmentation and analytics to deliver customized messages to smaller and smaller groups of people. But, alas, customers are getting smarter — and any type of marketing pitch is becoming less effective. So what are firms to do?

Find your soul!

The path to redemption starts by anwering two questions (honestly):

• How is your organization truly different?

• How do you want your organization to be truly different?

These questions need to be asked from the perspective of all of your key constituent groups, which for most companies starts with customers and employees. Howard Shultz, founder and Chairman of Starbucks, has been quoted as saying…

Customers must recognize that you stand for something.

If your looking for me to now provide a step-by-step process for saving your souls, you’ll be disappointed. While I’ll probably touch on some left-brained approaches in future posts, the path to salvation starts with a more right-brain commitment to re-defining or re-invigorating what your organization stands for. So instead of reading some itemized advice, I suggest that you start by watching this video…  

The bottom line: It’s time to find (or restore) your organization’s soul!

Words Of Wisdom: Stanley Marcus On Customers As People

Stanley Marcus, who was president and chariman of the board of Neiman Marcus, was quoted as saying:

Consumers are statistics. Customers are people.

I think he was telling us that great experiences need to accomodate the specific needs, wants, and aspirations of individuals — who just happen to also be customers.

My take: Unfortunately, many companies don’t seem to understand this concept. I often find that firms either lack any real understanding of their customers or they rely almost completely on analyses of their data warehouses. That’s why I often find myself telling clients…

“Your customers don’t live in spreadsheets; you need to go out and talk to them to understand who they are as people. That is, of course, unless each of your customers is really a 55% female with 2.3 kids who is 48% from a suburb and is 11% hispanic.”   

It’s not that analytics are bad (they’re actually quite helpful), but they don’t provide enough of an understanding of “people” to design and deliver great experiences. That’s why companies should use design personas — as I discussed in my previous post called “Get To Know You Customers Persona-lly“

In order to get a sense of what we mean by a design persona, here is a an example from WHITTMANHART that was shown in an excellent Forrester research report called Best And Worst Of Personas, 2007 by Moira Dorsey (Note: This is only a partial view of the persona).

The bottom line: Experiences need to satisfy individual people, not consumers.