Author Archives: Ian Watson

Nobody sells widgets anymore

Posted on by
Reply

No-one sells widgets any moreMost people have heard of wid­gets, hypo­thet­ical thingama­jigs man­u­fac­tured and sold to hypo­thet­ical cus­tom­ers of hypo­thet­ical busi­nesses. They are often used in exam ques­tions in busi­ness courses such as account­ing, eco­nom­ics and even more often in mar­ket­ing classes. However, the study of mar­ket­ing has evolved from dis­cus­sion of selling mere widgets.

It could be argued that mar­ket­ing is not only about selling man­u­fac­tured things, like wid­gets, but rather provid­ing a ser­vice to cus­tom­ers. In their 2004 paper, Stephen Vargo and Robert Lusch describe this concept nicely when they say:1.

“…times have changed. The focus is shift­ing away from tan­gibles and towards intan­gibles, such as skills, inform­a­tion, and know­ledge, and towards inter­activ­ity and con­nectiv­ity and ongo­ing relationships.”

So what does this migra­tion away from man­u­fac­tured objects and towards ser­vices mean for the busi­ness manager?

Man­aging the Myths

If you’re look­ing to under­stand why everything you offer is a ser­vice, it’s import­ant to con­sider four aspects of what you’re mar­ket­ing. Again, bor­row­ing some­what from Stephen and Robert:2.

be mind­ful of your cus­tom­ers’ per­cep­tion of your service

  1. Even tan­gible objects that you sell have an ele­ment of ser­vice to them. A more obvi­ous example is a smart phone (a phys­ical object) with a sub­scrip­tion to phone and inter­net ser­vices. It is import­ant to exam­ine everything you have on offer and try to under­stand the ser­vice it provides and how it can bet­ter meet your cus­tomer needs.
  2. Customer’s per­cep­tions play a large part in how they eval­u­ate what you have on offer. This is because ser­vice levels can vary a great deal more than the phys­ical dimen­sions of quality-controlled, man­u­fac­tured wid­gets. As a busi­ness man­ager you need to be mind­ful of your cus­tom­ers’ per­cep­tion of your ser­vice and make the most out of the oppor­tun­ity to cus­tom­ise your ser­vice to match indi­vidual cus­tom­ers’ needs.
  3. You don’t neces­sar­ily need to be there with the cus­tomer to provide a ser­vice. There are count­less oppor­tun­it­ies to add and enhance the ser­vice com­pon­ent of what you’re offer­ing cus­tom­ers. One of the best examples of this is mak­ing inform­a­tion about the sup­port that you provide to cus­tom­ers pre– and post-purchase avail­able on online.
  4. Ser­vices, like objects, can fail, they can become less fash­ion­able, they can be rep­lic­ated. It is essen­tial that you con­tinu­ously improve and innov­ate your ser­vices. It is vital that you ensure you under­stand the needs of your cus­tom­ers and look at new and more effect­ive ways to meet their needs.

No one just makes wid­gets any more – if there is a phys­ical object to be offered at all it is entwined with a ser­vice of one kind or another. A lucid man­ager under­stands how to make best advant­age of the ser­vice aspect of what they offer to cus­tom­ers and under­stands that a wid­get is merely a tan­gible and small part of the ser­vice being offered.

Share on TwitterSubmit to StumbleUponSubmit to reddit
Notes
  1. Vargo, S.L. and Lusch, R.F. (2004) The Four Ser­vice Mar­ket­ing Myths: Rem­nants of a Goods-Based, Man­u­fac­tur­ing Model. Journal of Ser­vice Research(6)4: 324–335. doi: 10.1177/1094670503262946. [↩]
  2. Vargo, S.L. and Lusch, R.F.(2004) Evolving to a new dom­in­ant logic for mar­ket­ing. Journal of Mar­ket­ing 68: 1–17. doi: 10.1509/jmkg.68.1.1.24036 [↩]

Don't want to be *that* guy

Posted on by
Reply

I know that you would rather shuffle self– con­sciously near the ser­vice counter and try to pre­tend you have noth­ing to do with that guy.

That guy is stand­ing there out­lining, some­what pas­sion­ately, just how dis­ap­poin­ted he is that, as a cus­tomer, his expect­a­tions have not been met. It’s almost a reflex that most of us don’t want to be part of con­flict in any way. Many would just take their busi­ness else­where; it’s bad enough to be near that guy, ima­gine being him!

Some com­pan­ies might, some­what rudely, label that guy a com­plainer. Com­plain­ing, how­ever, is merely a descrip­tion of what he is doing. He should be viewed by the busi­ness as Santa Claus bring­ing the gift of opportunity.

Rather than walk away, quietly tak­ing his money with him, he is actu­ally provid­ing crit­ical mar­ket­ing intel­li­gence and provid­ing a golden oppor­tun­ity to turn some very neg­at­ive word-of-mouth pub­li­city into a dis­tinct pos­it­ive message.

if you’ve mis­in­ter­preted their con­cerns, empathise!

We all have stor­ies of com­pan­ies who have done a bad job of “Ser­vice Recov­ery”. I recently became that guy when a local com­pany failed to do what they prom­ised to do for a mem­ber of my fam­ily. After send­ing a writ­ten com­pli­ant, the man­ager of the com­pany called and asked to meet with me and what I exper­i­enced was ser­vice recov­ery done the right way.

The way that this man­ager handled the meet­ing provides an excel­lent tem­plate of how to deal with a customer’s com­plaint in a way that, in most cases, will lead to cus­tomer sat­is­fac­tion and excel­lent word-of-mouth endorse­ment. The five steps that he used were:

1. Thank the cus­tomer for mak­ing the complaint

It’s likely that the cus­tomer will feel awk­ward. It is easy to say, “Thank you for telling us about this prob­lem, most people would have just left but you’ve given us the chance to fix this prob­lem, not only for you, but for other cus­tom­ers.” Being thanked for mak­ing a com­plaint is often sur­pris­ing for the cus­tomer but helps them feel more open to dis­cuss the problem.

2. Out­line your under­stand­ing of the problem

While simple, this lets the cus­tomer know that you have heard their com­plaint and allows them to cor­rect you if you’ve mis­in­ter­preted their con­cerns; empath­ise! Show them that you under­stand the impact on the customer.

3. Take per­sonal respons­ib­il­ity for fix­ing the problem

This is a tough one to do. While you might not feel that you per­son­ally are at fault, the cus­tomer will often need someone to be account­able for fix­ing the prob­lem. A simple approach is to say, “I could have made sure that my staff were aware that this approach may caused you and I didn’t do that well enough on this occa­sion - I take per­sonal respons­ib­il­ity for fix­ing this problem”

4. Nego­ti­at­ing an agreed approach to fix­ing the problem

In most cases this could be simple. A refund, a next free visit, an apo­logy. It is also vital that you out­line how to ensure that the prob­lem does not hap­pen again. Dur­ing this step it is essen­tial that you gain an accept­ance from the cus­tomer that the solu­tion is agreed upon and that it will resolve their concerns.

5. Do what you prom­ised to do to fix the problem!

Whether you actu­ally deliver on your prom­ise to fix the prob­lem or not the cus­tomer will tell oth­ers. By deliv­er­ing on the prom­ise, you get to choose pos­it­ive word-of-mouth endorse­ment and much higher levels of cus­tomer sat­is­fac­tion. I’ll leave it to your ima­gin­a­tion what stor­ies will be told if you don’t deliver.

Cus­tomer ser­vice engin­eer­ing may still be, in the lar­ger part, more art than sci­ence. It is import­ant to bear in mind that “indi­vidual res­ults may vary” but tak­ing the five steps to cus­tomer ser­vice recov­ery very much increases the odds that you’ll turn that guy into one of your company’s best resources.

Share on TwitterSubmit to StumbleUponSubmit to reddit

Not another bloody process!

Posted on by
6

How often have you been in a meet­ing and when dis­cus­sions reach a sticky issue someone, who I’ll call the ‘pro­ces­si­fec­ator’, chills you to the core by saying:

“We obvi­ously need to develop a pro­cess for this”

You let out a sigh of dis­be­lief, know­ing that the momentum of your team is in jeop­ardy and you need to break this impend­ing dead­lock before the pro­ject stalls. For­tu­nately you know how to deal with situ­ations like this because you know the seven wrong reas­ons for devel­op­ing a pro­cess.

A pro­cess is an instruc­tion on how to per­form a routine task to reduce the risk of trip­ping over prob­lems that have been anti­cip­ated or encountered in the past. Pro­cesses often form part of a busi­ness man­age­ment sys­tem, such as ISO9001). Pro­cesses are use­ful, however …

A pro­cess is a pre­ci­sion weapon that should only be used when it adds value. Wrong pro­cesses leads to toxic pro­ces­si­fec­a­tion, which grinds innov­a­tion and cre­at­ive think­ing to a halt. Here are seven good reas­ons not to have a process.

1. Pun­ish­ment

You’ve made some­body angry and now they want to exert some power over you. Under these cir­cum­stances it is import­ant to deal with the under­ly­ing reas­ons that the pro­ces­si­fec­ator is pun­ish­ing you and move on.

2. Lazi­ness

The pro­ces­si­fec­ator doesn’t want to do the work and rather play Mine­sweeper or check Face­book. A pro­cess can provide an excuse not to think about an issue and just tick the boxes as you pro­gress. Lazi­ness is def­in­itely going to have an impact on innov­a­tion as a pro­cess can stop free think­ing in its tracks.

3. Ignor­ance

There is already a pro­cess that is avail­able and doc­u­mented that is appro­pri­ate — maybe with some minor modi­fic­a­tion. Provide a copy of it and move on.

4. Secur­ity Blanket

The pro­ces­si­fec­ator doesn’t want to be blamed for a decision and hopes to avoid this by ensur­ing that all of the stake­hold­ers are “on board”. While com­mu­nic­a­tion with stake­hold­ers should not be ignored, you should not dis­reg­ard the money you’re pay­ing someone for their expert­ise, rather than slav­ishly fol­low­ing a process.

5. One-off Activity

Almost uni­ver­sally, one-off activ­it­ies should not be doc­u­mented — unless health, the envir­on­ment or large amounts of money are at stake. In most cases it will be enough to dis­cuss the task first, do it, then move on.

6. Per­form­ance Management

Pro­cesses are some­times developed because an indi­vidual is not com­pet­ent and requires guid­ance in per­form­ing a task. Cre­at­ing a pro­cess to man­age per­form­ance is risky because some­body is per­form­ing a task that is bey­ond their level of competence.

7. It’s a trap!

The final and worst reason for cre­at­ing a pro­cess is to delib­er­ately spring a trap so that someone (the ‘tar­get’) will fail to fol­low that pro­cess, jus­ti­fy­ing the sub­sequent dis­cip­lin­ary action or dis­missal. This is one of the worst reas­ons for devel­op­ing a pro­cess because you’ll be left with a flawed pro­cess and team mem­bers who will shift from per­form­ance beha­viour to risk avoid­ance beha­viour. This will have a fun­da­mental impact on trust between team mem­bers and per­form­ance of the team.

When it’s all said and done …

There are good reas­ons to cre­ate a doc­u­mented pro­cess. The most appro­pri­ate occa­sion to write a pro­cess is when doc­u­ment­a­tion leads to sig­ni­fic­ant improve­ments in pro­duc­tion effi­ciency or cus­tomer exper­i­ence and, more broadly, when the risk of not doc­u­ment­ing the task is greater than the risk of doc­u­ment­ing the task.

If the reason for a doc­u­mented pro­cess is not clear when the pro­ces­si­fic­ator speaks up, it is likely that you’d be bet­ter off without one.

Share on TwitterSubmit to StumbleUponSubmit to reddit

Women Do Not Make Good Executive Managers

Posted on by
3

The title of this post is pat­ently absurd.

The pur­pose of a title like Women Do Not Make Good Exec­ut­ive Man­agers is to appeal to any­one who holds a strong view on the mat­ter (and wel­come to this blog — I hope the fol­low­ing thoughts don’t hurt too much!). Admit­tedly, I could have chosen the title, Men Do Not Make Good Exec­ut­ive Man­agers, but that was in a strange twist of polit­ical cor­rect­ness, less con­tro­ver­sial and atten­tion grabbing.

Key skill of a lucid man­ager is the abil­ity to chal­lenge your own beliefs and respond to evid­ence and data. In the words of Carl Sagan:

It is bet­ter by far to embrace the hard truth than a reas­sur­ing fable.”

I’ll lay my cards on the table here and let you know that I per­son­ally believe that the effect­ive­ness of an Exec­ut­ive Man­ager is a com­bin­a­tion of intel­li­gence, people skills, train­ing, innov­at­ive think­ing, tech­nical know­ledge, cor­por­ate and team cul­ture com­bined with myriad external factors. Gender, of its own accord, is unlikely to sig­ni­fic­antly change the Executive’s effectiveness. Regardless, a vast major­ity of Exec­ut­ive Man­agers in Aus­tralia (and other coun­tries) are males.1.

So, if more Exec­ut­ive Man­agers are male, does that imply that males are more pre­dis­posed to being Exec­ut­ives? The simple answer is, ‘No”. This type of reas­on­ing is a com­mon logical fal­lacy known as post hoc ergo prop­tor hoc, which is a pop­u­lar device among politi­cians. In this case the fal­lacy lies in the assump­tion that the fact that most Exec­ut­ive Man­agers are male (post hoc) is proof that they are exec­ut­ives because of their gender (ergo prop­tor hoc). While the absurdity of this extreme example may seem obvi­ous, less obvi­ous fal­la­cies go undetec­ted in the work­place. It seems that crit­ical think­ing is less likely to be engaged when encoun­ter­ing many of the pop­u­lar per­son­al­ity tests.2.

Many dif­fer­ent per­son­al­ity tests are used around the world to sep­ar­ate people into cat­egor­ies. The inten­tion is to sug­gest a beha­vi­oural or career pre­dis­pos­i­tion; an example being those cat­egor­ised as ENTJ — “The Exec­ut­ive”, the clear implic­a­tion being “ENTJs Make Bet­ter Exec­ut­ives”. In some cases research is claimed, but rarely cited, to demon­strate that par­tic­u­lar ‘types’ are found in par­tic­u­lar pro­fes­sions or roles imply­ing that people of a par­tic­u­lar per­son­al­ity pro­file are most appro­pri­ate for that type of role. This post hoc ergo prop­ter hoc ration­al­isa­tion is as unjus­ti­fi­able as the state­ment “Women Do Not Make Good Exec­ut­ive Man­agers”. It is this type of ration­al­isa­tion that can under­mine the decision-making pro­cess of any man­ager which, in turn, under­mines their effectiveness.

A lucid man­ager will be more effect­ive if aware of decision-making traps

On a daily basis man­agers are faced with many decisions and each manager’s effect­ive­ness is, in a large part, determ­ined by the effect­ive­ness of their decision-making abil­ity. A lucid man­ager will be more effect­ive if aware of decision-making traps such as post hoc jus­ti­fic­a­tions; par­tic­u­larly when the faced with the ques­tion, “Do you think we should use a per­son­al­ity test?”.

When con­fron­ted by this ques­tion it is far bet­ter for a man­ager to chal­lenge their own beliefs and to pos­sibly even embrace hard truths by ask­ing whether per­son­al­ity tests are merely a reas­sur­ing fable.

Share on TwitterSubmit to StumbleUponSubmit to reddit
Notes
  1. For fur­ther inform­a­tion check the 2008 EOWA Aus­tralian Census of Women in Lead­er­ship which reports that only 10.7% of ASX200 Exec­ut­ive Man­agers were women des­pite women com­pris­ing 44.9% of the Aus­tralian Labour Force. [↩]
  2. See also our pre­vi­ous post, The Lies we Tell and a reflect­ive essay on the use of per­son­al­ity tests, Know Thy­self. [↩]

Learning to Drive a Bus

Posted on by
Reply

One day last sum­mer, on my way to work and dressed in my busi­ness suit, I boarded the bus to find only two other people on board: a trainee driver and his instructor sit­ting two rows back from him. As I boarded, I said, “Good morn­ing” to the driver.  When I walked past the instructor he said, “It’s going to be easy for you, work­ing in your air con­di­tioned office all day while we’re stuck in this thing for ten-and-a-half hours in this heat.”

Admit­tedly the weather fore­cast was for 42°C through­out the day: I did feel some sym­pathy for their situ­ation and respon­ded, “I hope it won’t be too bad for you today”.

I sat down and thought about how, des­pite it being the Monday after a really excel­lent week­end, I was going to work feel­ing that the fol­low­ing week held many pos­sible oppor­tun­it­ies and felt quite pos­it­ive. The instructor’s remarks were, how­ever, like the arrival of dark clouds.

I sat quietly and decided not to allow someone else to choose my mood for me so I set aside his remarks and men­tally pre­pared for the day ahead. He decided, how­ever, that he wasn’t fin­ished with me yet…

Apro­pos to noth­ing, he told me that his philo­sophy on life was to “Trust no bas­tard and hate every­one”. I had come across people that had a bleak view of human­ity in the past, but few who rivalled the instructor’s point of view. I decided to politely listen but not chal­lenge him – I could tell from his atti­tude that he was look­ing for an argu­ment so that I could con­firm his beliefs.

“I’m going to be stuck in this glass cham­ber all day, in this heat and so will he,” he said as he poin­ted to his stu­dent, “but I feel sorry for him: he has to drive all bloody day.”

I wondered if this man’s philo­sophy on life placed him dir­ectly in the middle of his cur­rent misery. Feel­ing very little sym­pathy for him by this point, I was look­ing for­ward to arriv­ing at my bus stop. I thought about what neg­at­ive thoughts and atti­tudes I held that made me miser­able. I would need to be more aware of this in the future but, my stop was approaching.

The Trainer then decided to share another of his views with me – that any­one with “dark skin, slanty eyes or a straw hat had bene­fits handed out to them by the gov­ern­ment and if you’re white ya get nothin’.”

It was then that any sym­pathy I had for him evap­or­ated and all my sym­pathy was with the driver. I wished the driver “Good luck” as I stepped off the bus.

As I walked to work, I moved my mind to the com­ing week and all that I might achieve in my “fancy air-conditioned office”. I felt good and am acutely aware that I have a lot to be thank­ful for: a won­der­ful fam­ily, a beau­ti­ful house, a steady job, and so much more. Today, how­ever, I had one more thing to be thank­ful for – that I’m not learn­ing how to drive a bus.

Share on TwitterSubmit to StumbleUponSubmit to reddit