Don’t Kid Yourself

This morning I’m sitting in front of a General Motors customer satisfaction survey. It makes me reflect on an interesting point – many companies go through the mechanics of conducting a customer satisfaction survey, but, let’s face it, they really don’t care. If they really cared about your customer experience they would notice that their survey methodology is flawed and incredibly biased by the actions of their dealerships. Auto companies happen to be the worst I’ve come across. But, there’s flawed and biased research in almost every industry.

Here’s my auto industry experience (and I’ll bet you’ve had a similar one). You buy a new car and the salesperson spends a significant amount of time telling you about how you would be taking food out of the mouths of their children if you didn’t give them the absolute highest marks on every question. They even go so far as to show you what a “correctly” filled out survey looks like! A few years ago our Mercedes salesman actually tried to bribe us with free merchandise if we would fill out the survey in his favor.  They both have told us that if we couldn’t give them the highest marks to just not fill it out.

Here’s another example. A few years ago a colleague of mine returned to his hotel room to pick up a forgotten item and found the cleaning person filling in the “customer satisfaction” card.

I had a client a few years ago that wanted to make sure that his survey could conform with an industry benchmark study – and then he wanted to make sure he could only submit the best responses. Sorry, our ethics would not allow that!

My guess is that these organizations really couldn’t are less about improving the customer experience. Their surveys are motivated by something else – an industry measure, a misguided corporate initiative or poorly designed measurement structure, etc. They go through the mechanics without ever actually using the information to improve the customer experience. Which is a real shame! They have the ability to enter into a conversation with their customers and collect tons of information about how to improve the customer experience and instead they bastardize the process to “game” the system.

So, where are the flaws in your customer experience feedback? Do those whom you are measuring have influence over the survey? Do you have control over survey distribution and collection? Is your data collection and analysis method really effective? Is your feedback mechanism tied to real organizational imperatives? Have you set goals and measures – and created a culture that ensure that employees really try to get the best information and act on it? Do the questions really get to the heart of the customer experience? Or better stated, would responses to the questions really tell you what you need to know about the customer experience? Are you doing anything with the results?

The biggest question you have to ask yourself: Do you really care? Or are you just going through the motions?

Just as an aside…we refused the Mercedes guy’s offer and filled in the survey honestly (especially after they delivered our car with a faulty gas gauge).

I’d be interested to hear your experiences and your ideas about how to keep these biases from being introduced into your research. Be sure to leave a comment!

A Few Random Predictions for 2010

It’s still early enough in 2010 for me to provide some of my tech predictions for the year. Here are a few random thoughts:

• Palm will finally go bye-bye. The writing’s been on the wall for several years. While they led the way in portable devices, they simply have not been able to translate that into smartphone success. They lost their edge by not seeing the convergence of PDAs, phones, etc. – and once they did, they just haven’t been innovative enough.
• E-Reader devices go big. We predict that within the next 18 months, e-readers will become very, very mainstream. Ultimately, however, look for this functionality to get rolled into smart phones.
• The term “smart phone” will start to fade. I don’t have any great suggestions for these “handheld computing devices” (OK, how’s that for a creative name, huh?). But, it will be something that reflects the convergence of multiple functionalities (schedule, phone, email, browsing, camera, music, etc.).
• Google will lose it’s mojo. They are starting to show signs of overreaching. They will start to appear more and more unfocused. They are trying to dominate too much, too soon. (But, I do think that this is the year that Google’s apps will go more mainstream and become a more viable alternative to Microsoft Office for more people).
• IPOs up, but M&A will rule. After 7 IPOs of venture-backed companies in 2008, and 8 in 2009, experts predict dozens this year. However, “dozens” is still not a huge number considering how many tech companies need expansion capital after an 18 month drought. Look for companies to access the capital they need through M&A deals. The valuations should improve. This could change if  huge, attention-grabbing IPO goes – like Facebook, Twitter, etc.
• Tablets are cool – but not cool enough. They still don’t bring tons of new functionality. Apple’s release will certainly get attention, but I think this sector will still underperform.
• Clear winners will begin to emerge in clean tech. OK, maybe it’s more accurate to say that the losers will become more apparent. I think the folly of wind and cellulosic technologies will shake this sector. Huge advances in solar – end even more importantly, new installation practices – will start to emerge. I’d also look for some big advances int the algae-to-biofuels space.

Well, that’s enough predicting for now! Do you agree with me? Do you disagree with me? Do you have your own predictions? I’d like to hear them!

Bricks, Mortar, and Bytes…part 2

Friday’s WSJ featured a story on how Barnes & Noble is cutting its 2010 forecast on the heels of a weak holiday season (read it here). The story envisions a more difficult road ahead for store-based booksellers. No argument from me. The question is “why”. My sense is that maybe bookstores are looking at the problem wrongly – or maybe in too limited a way. My guess is that B&N sees the operation of its online property as distinct from its physical properties. The way to success is for both to work together to deliver an overall experience. Does the word “customer-centric” come to mind? Customers buying habits (mine included) often includes seeing and feeling something physically, deciding on a purchase, and then buying where the price is cheapest (often online). If B&N can make the browsing experience a customer-engaging, loyalty-building one (tied closely with their online property), they will have a winner.

This problem is also not unique to bookstores of course. Electronics retailers (and many others) have the same issue. How many times have you considered purchasing a camera, an iPod, a DVD or BlueRay, etc. without wanting to touch it first? And then once you made a decision, you searched the web to find the cheapest overall price – as long as it’s from a seller you trust.

In my opinion, the key is for companies like B&N to recognize customers’ true buying behaviors and develop a more complete customer experience. A few thoughts:

• Their membership program costs $25 a year. People are used to free loyalty programs. I’ll bet they miss a lot of customers that way. Customers that they could be emailing, inviting to events, dropping coupons to, etc.
• Why can’t I do a ship-to-store thing? It would save customers shipping costs to make prices more competitive and it would drive more traffic into the stores.
• Are prices in the stores the same as online? I haven’t researched it yet. There needs to be some online and bricks-n-mortar price rationalization – or else why would I buy a book in person unless I just really want it today? The convenience factor is worth something, but for many people probably not as much as the price difference.
• Do they do anything in their stores that would drive me there? Do they invite book clubs or other groups to meet there? And the key here is LOCALIZATION. Each store needs to develop a way to get to know its own customers and developing a unique experience.

The competition in this space is only getting more fierce. The winners will be those with high customer loyalty driven by a really remarkable, engaging customer experiences that are aligned with customers true buying habits – not the buying habits they wish you had.

I’d welcome your comments!

Bricks, Mortar, and Bytes

An interesting WSJ article this morning considers whether Wal-Mart’s combination of stores and online assets (and the interaction between the two) provides it a competitive advantage over Amazon.com. This has been my theory since the craze of the late 90s. You remember the late 90s…when some analysts speculated about the disappearance of bricks and mortar stores in favor of exclusively online shopping?  It was always my contention that the winners in the online retail space could very well be those that learn how to marry their store and online properties. While, it may not allow Wal-Mart to flat out beat Amazon, it certainly gives them a strong platform to compete.

The article mentions the benefits of Wal-Mart’s “Ship-to-Store” program, but misses one area that I think is important to consumers – the issue of product returns. With Amazon, you must return/exchange the product via mail. But, with Wal-Mart, you can actually return the item directly to the store – a process which is faster and gives consumers more confidence (rather than relying on shipping returns through the mail).

Although not perfect (Wal-Mart has been playing with the “Ship-to-Store” process – such as creating a dedicated “Ship-to-Store” pick-up location) Wal-Mart’s results are showing that this model is strong and tough to beat.

Seven Business Tips for the Economic Recovery

It’s becoming increasingly clear that the economy is in the early stages of a recovery. Ignore the latest consumer confidence numbers (47.7 October Conference Board Consumer Confidence Index) and the unemployment rate (9.8% in Sept.) for a moment. Consumer confidence will recover as unemployment begins to show signs of easing – probably later this year into early next year. Employment is traditionally a lagging indicator. Businesses will only start hiring full-time employees when they have confidence that they will be able to keep them on.

The big question for companies is how they are preparing themselves for the recovery. A few thoughts as you prepare for the recovery:

1. Slow times ahead. Most expect the recovery to be anemic. Many see a difficult road ahead for inflation, employment, pay/income, interest rates, taxes, and other economic pressures. Consider how this will impact your operations in the future – customer purchasing habits, available growth financing, etc.
2. Changes for good. It may be difficult to separate the things that changed for the duration of the recession from those that changed permanently. For instance, some percentage of customers that switched brands due to lower-costs probably will not return. Customers that have learned to live without your product or service at all may not return. Either way, lost customers will need to be sold to again – just like new customers. You need to understand the fundamental shifts in your market.
3. Sow what you reap. What you did during the recession will impact how you engage in the recovery. If you treated customers badly – cut customer service, etc. – those decisions can come back to haunt you. Lost customers may be lost forever.
4. Don’t overreach. Be careful about overextending financially. Companies (and individuals) with resources may be tempted to buy up distressed assets. And it’s true that asset prices may represent the lowest prices we see in our generation; making this a real buying opportunity. However, sometimes those assets were distressed for a reason (they underperformed during lean times). They may not generate adequate cash flow for quite a while. Are you prepared to fund the operations, taxes, maintenance, and other costs until the asset can start producing? Does the asset really fit in your strategic plan? Or do you just feel like you should be buying because assets are perceived to be inexpensive? An apartment complex may appear to be cheap vs. 18 months ago, but if you don’t know how to operate an apartment complex and/or aren’t in that business, the overall investment may not make strategic sense.
5. You’re not alone. The competition will continue to be fierce. A bunch of hungry companies coming off a recession will be fighting for that business. Everyone wants to grow and get back to normalcy fast. You are not the only one. Marketing budgets will be ratcheting up quickly to increase market awareness. See today’s WSJ article about the swift increase in marketing in the technology sector – and among some well-known players like Microsoft and Google.
6. Employee defections. Consider any new employees you may have hired during the last year or so. Did they join because they simply needed a job (any job) – or are they potentially longer-term employees? Look at your employee roster. Do any seem to be underemployed? Often as a recovery progresses, job opportunities start to develop and employee defections rise. Consider who is important to your business and start working on a plan to retain them.
7. Links in your supply chain. How did your suppliers and other partners fair during the downturn? A few months ago they were all willing to bend over backwards to keep your business, weren’t they? How did you react? Don’t be surprised if over the next few months they begin to press you for more favorable terms?

As we (finally!) read more positive news each day, it’s easy to get swept up in the cheering. And now is definitely a great time to consider your next strategic steps. Are you ready?

Moving Search into Warp Speed

As I read about the beta launch of Wowd’s new real time search engine, I thought 2009 may go down as the year of the search engine battles. And, no not Google vs. Microsoft. Google feels old and static – only as good as its last web crawl of mostly static web pages. (There I said it!) And yet still most people would agree that Google is about the best out there. With maybe Microsoft’s Bing a runner-up. But 2009 is shaping up to be the year that search moved into warp speed – real time searching.

The time has come to move search engines into real time – to find a way to incorporate more real time information into search results. More web traffic is in alternative media such as blogs, micromessaging, video, and the like. These really need to be dropped into search results more effectively.

A number of companies are now actively tackling the issue. A number of search engines were released this summer – here’s a good overview of some of them from VentureBeat. And as VentureBeat said: “The issue for real-time search is figuring out the right balance between immediacy, popularity and relevance.” Most of these incorporate some form of social media tracking to surface topical trends. Not a bad idea; although it still feels incompletewhen you think about all the ways information gets dropped into the web now.

And here’s Doc Searls on yesterday arguing that live web search should encompass more types of media – such as more emphasis on better searching of the blogosphere.

It seems that no one has been able to hit a home run yet (and interestingly Google and Microsoft don’t really seem to be in the game) – but many are taking some really good swings. You should keep your eye on this market – and test drive some of these new tools.

Have you used any of these newer real-time search engines (Almost.at, Scoopler, Tweetmeme, OneRiot, DailyRT,  Topsy, etc.)? What was your experience? Do you have any other to add? I’d like to hear from you!

The Problem With Redefining “Innovation”

I read with interest Brian Reich’s blog at FastCompany.com on the difficulties of innovation – and how we might need to change the definition or our expectations of the results. I agree that innovation is certainly difficult to accomplish; and that we are often disappointed in the results. However, I don’t agree that changing the definition or our goals is the way to go.

I suggest that we merely recognize that change can happen at various levels within an organization:

• Operational/day-to-day improvements: Looking for and making changes at a day-to-day level. Changing the way a process or a procedure works, for instance. Example: Adding information to your company’s invoices to give customers more transparency into pricing.
• Strategic: Adding new products or services, entering new markets, or fundamental business model changes. These ideas are big enough to shift company direction and/or focus. An example would be an international expansion or Google’s entry into the operating system game.
• Disruptive: These are changes that fundamentally “change the game” – those that build a new industry, makes others obsolete, or fundamentally change the way things are done.  Think eBay, social media technologies, the iPod, or the PDA.

In my opinion, I think it’s just important to appreciate and value all these levels of change and improvement. However, innovation should continue to be limited to those changes that are truly strategic and “game changing”.

It is important to build a culture that welcomes change, innovation, and seeks out new ways of doing things – at ALL levels. This requires a culture that celebrates innovative successes (and even attempts that are less successful), encourages employees to generate (and share) ideas, and has processes in place that support innovation.

Another idea I would introduce into this discussion is for companies to look for ways to reach out and collaborate with customers at all these various levels. This can (1) generate ideas that may not get thought of otherwise and (2) raise the odds of success. You may have to select specific customers (or a good cross-section of customers) to get the results you want.

So, I don’t think we need to redefine innovation; just recognize that incremental change is important – but still look for and support the Big Idea.

I’d like to hear your thoughts…

Defending Your Online Reputation

This WSJ article on improving your online reputation in essence highlights three ways to combat negative online reviews:

1. Reach out immediately to dissatisfied reviewers
2. Flood search engines with content you can control.
3. Appeal to bloggers to review your company or your product.

In general, I agree with the author’s analysis – these are some practical tips for handling negative online reviews. However, they smell a little too defensive and artificial to me. They sound more like ways to hide or brush aside (or simply overpower) negative reviews rather than actually caring about customers opinion and making sure that a balanced set of opinions gets heard. This tactic typically backfires because it seems insincere.

I most agree with the first one. A business should always try to reach out and rectify a relationship with an unsatisfied customer. As I’ve said before in this blog the way a business handles a negative customer experience can sometimes lead to a much stronger long-term relationship. After all, most customers don’t expect you to be perfect. But, they do expect you to care about the relationship. If you don’t, why should they?

Also, I would add an Item 3a: Instead of (or in addition to) going to bloggers, ask your actual customers to rate you and/or your product. If you are indeed treating customers well, the positive reviews should quickly outweigh the negative and provide the reader a more accurate picture of your company, your products, and your customer experience.

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Please be sure to leave  comment and tell me what you think. Do you have any additional ideas? Do you disagree with mine? I’d really like to hear what you have to say.

The 8 characteristics of innovative organizations

In my years of observing many different organizations – of different sizes, different industries, and different stages of growth and development – I have noticed a few things about innovative organizations. These are the organizations that are always coming up with new ideas, new products, new ways to serve customers and add value. I have tried to boil these down to just a few characteristics.

1. Celebrate failure: OK, that’s not really accurate. No one really celebrates failure. But they do celebrate the attempts at successful innovation. They do not consider an idea that does not end up as a rousing success as “career ending”. And they always seek to learn from these pursuits. They encourage employees to introduce new ideas and to always look at what they are doing with an eye towards doing it better.
2. Supportive atmosphere: Innovative organizations provide an open environment with the freedom to kick around and explore ideas – even seemingly crazy ones. These offices often have white boards, flipcharts, markers, conference tables everywhere to encourage on-the-spot creativity. Meetings are usually not boring and sometimes include laughter as crazy ideas are discussed and debated.
3. Open culture: These organizations encourage people to get to know each other across the company. After all, it’s not just a marketing person, or a salesperson, or an engineer that will bring a great new idea to market. It’s a cross-disciplinary team working together.
4. Openness with customers: And I don’t just mean a once per year satisfaction survey. I’m talking about proactively inviting customers to talk openly about company performance and provide ideas and input into developing new products and services. Ask them to participate in product and service design, development, and testing.
5. Market knowledge: In innovative organizations, everyone knows who the organization’s target markets are, who their customers are (and their needs), and who their competitors are. They know the organization’s products and services and how they compare to those of their competitors. They keep abreast of market trends – and the leadership team actively helps them stay up to date.
6. Clear mission/vision: Employees of innovative organizations really understand the organization’s mission and vision – and can live within (and sometimes push the boundaries of) them. This is a result of a culture that involves them in strategic thinking. New ideas are “tested” against this strategic vision to see whether the new idea moves the organization closer to that vision.
7. Set employee expectations: Innovative organizations expect employees to come up with good ideas. Often it’s actually built into the hiring and measurement processes. These organizations look for ways to identify prospective employees who are not just experienced and technically competent in what they do, but also demonstrate a spark of creativity, a willingness to take risks, to offer ideas, and are comfortable in an open, creative environment. These are the people who are willing to be the first to draft a document that others will review, revise, and edit. These are the people who may begin a sentence with “This may sound crazy but what if we….”. Employees are encouraged to help recruit like-minded people.
8. Broad-perspective employees: Employees bring their different perspectives, their different talents, and different mindsets. They might come from differing backgrounds, different academic disciplines, even different industries. They are open to exploring and adapting new ideas – from almost anywhere. They also don’t feel constrained by what has been tried before.

I believe that an organization that can build this type of an organization will (more often than not) find success and lead their industry. I’d be interested to hear your opinons. Do you agree or disagree with my list? Should I add others? What has worked in your organization? Leave a comment!

Inspiring Leadership

Let’s begin with a contrast. Listen to the immortal words of JFK in 1962:

“I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth. No single space project…will be more exciting, or more impressive to mankind, or more important…and none will be so difficult or expensive to accomplish…”

Clear, concrete, and visionary, right?

Contrast that with the words of Norman Augustine (former CEO of Lockheed-Martin), chairman of the president’s independent blue-ribbon panel on spaceflight after their final public meeting earlier this week: (you can hear this line in the NPR story here)

“It would be difficult, with the current budget, to do anything that’s terribly inspiring.”

And this is the group that is charged with advising the president on the future of space flight.

Which one do you find exciting and visionary? Which one do you think is more likely to inspire people to pull together and achieve something great?

I talk and work with many organizational leaders each year. At some point or another, one of our discussions usually turns toward how to “inspire the troops”. Thinking back on about these conversations has made me consider what I usually tell them. It’s often something like this: Clearly picture your vision for the future and then share that picture with your employees, your customers, the media…anyone who will listen. Everyone wants to be part of a winning team that’s doing exciting things. People look for something beyond themselves and beyond just their everyday activities. Get excited and give them a bandwagon to jump on! Too often leaders lack passion and conviction about what they are doing…and then wonder why no one else has it.

Here are a few ideas:

• Tell an inspiring story – paint a vision. It’s important for an organization to be able to clearly see that future vision. You should be able to get in front of your organization and say “Picture this…” and then paint a clear, concrete, visionary picture of the future. Many leaders I speak with think they can’t do that, but I know they can. When I ask them to describe their vision to me in private, they can do it almost immediately. They know where they want to go. They are just too hesitant to say it out loud or to put it on paper. Often they feel that they need to be able to describe every step along the way before they commit. Don’t be uncomfortable with a lack of detail. Your stakeholders want to hear and “see” your vision – not hear every detail about how to get there. An important part of a leader’s job is to keep the organization pointed in a clear, long-term direction.
• Tell ‘em why. Why does this vision matter? What will it achieve? What’s its higher purpose? What’s the ultimate goal? Why would anyone want to help get there? Tie your vision to your organization’s mission. It’s not enough to describe a destination. It’s important to tell others what happens when they get there. It’s not enough to just describe a big, new facility as part of your vision. The important thing is to explain what you plan to do with that facility; how it helps your organization better achieve its mission. (We will be able to provide our customers more options which will help them achieve their goals. We will be able to heal more patients or treat more diseases. We will be able to teach more children.) You get the point.
• Turning back to the space program for a second. Do you find the president’s current vision – to return to the moon by 2020 – terribly inspirational? Do you sense a groundswell of national excitement? No? Why not? Well, for one, it’s been done (40 years ago to be exact!). It lacks purpose.
• Celebrate actions that help achieve that vision. Along the way, it helps to continue explaining your vision by supporting those activities that propel your organization toward it – and sometimes pointing out those that don’t. If your employees take the initiative and do something that supports that vision don’t hesitate to acknowledge it. If your team reaches a goal that is aligned with that vision, celebrate it.
• Really deliver it! Don’t hesitate to get excited. So many organizational leaders think they need to always be serious, staid, emotionless. You know what? Your employees, your investors, your management team, your donors – are looking for a little passion. If you are not passionate about the future, why should they be? If you don’t “feel it”, why should they? But, be genuine. You can’t manufacture passion. Your “excitement” will fade quickly and so will theirs. It’s about a true commitment to something big.
• Be honest and practical about the path to implementation. Leaders don’t simply work from a budget. They don’t wait for someone else to tell them how much they can spend. They define the budget. They drive budget priorities. They understand and respect the challenges that must be faced. JFK didn’t just say “let’s go to the moon”. He also talked about how the space budget must be increased and that the rockets that would take us into space would be “… made of new metal alloys, some of which have not yet been invented…”. Set practical, reachable interim goals. A vision challenges your team to creatively solve problems – with an eye toward that ultimate goal.

So this is my advice to leaders everywhere: Know your vision, be able (and willing) to describe it clearly, passionately, and with conviction. See what happens!

Please leave your comments about what you would add! I’d like to hear your thoughts. And be sure to invite others to read and comment!