Leadership/Management

What kind of manager are you? A,B or C?

April 14, 2022By Mike Hohnen

We all learn from the feedback that we receive. That is probably no surprise. Your golf stroke is hard to improve if you are blind-folded, you need to see where the ball lands in order to correct your aim. That is one aspect of feedback.

To get really good, we need more than our own observations in order to improve. We need feedback from others who are also observing what is going on. Maybe even someone who encourages us to believe that we can do better than we thought possible ourselves.

So imagine the following scenario.

We take three people. Stand them in a line next to each other and in front of each of them place a bucket at about 5 meters distance. Once they have seen the bucket, we blindfold them and hand them another bucket with 10 tennis ball in it. Their job is to throw the tennis balls and get as many of them as possible into the bucket.

Each person is assigned a manager. And each manager has been instructed to behave (manage) slightly different.

On team A, the manager makes no comments as each ball is thrown but will just count how many balls are in when the session is over and will give the team member a performance review based on that. In this case, the only feedback the team member gets is the sound of the tennis ball hitting or not hitting the bucket.

On Team B, the manager has been instructed to comment on each throw and if it is not in the bucket then point out what the problem is. “Too far, too short, again! way to the side etc.” If the ball is in, the comment is just: “It’s in.”

On Team C, the manager has been instructed to give more detailed feedback on each ball combined with encouragement. “That was just 10 cm too far left but otherwise great shot, try again. Take a breath and focus etc.”

You can try this experiment for yourself. I often do it with larger groups of managers. But you probably do not need to perform the experiment to guess who of the three consistently gets most tennis balls in the bucket at the end of the day.

It’s pretty elementary my dear Watson, as Sherlock would say, but despite that, if you ask employees or middle managers, they are going to tell you that type A or B managers are much more common in their life than type C managers are. From a performance point of view, that is problematic. If we don’t have a positive constructive feedback culture, we will be underperforming, it’s that simple.

So the big question you need to ask yourself is what kind of manager are you?

Take it a step further. Imagine we added a four team, Team D. And here the instruction to the manager is. No matter what happens, just praise and be positive. But no detailed feedback. So this would sound like “Yes! Well done. Wonderfull. Wow!” and so on…

Now I am not suggesting that many managers are giving this kind of useless feedback to their people. No, the problem here is that this is the kind of feedback many managers RECIEVE from their team members. If team members do not feel 100% confident that it is safe to give Type C constructive feedback to their boss then they either say nothing or use some variants of the D style.

How effective is that going to make you? How are you going to know much about how well you are performing as their manager?

So as Ed Catmull writes in his lovely book Creative Inc, “In the beginning, all our movies suck but because we have a culture of candour, we can improve them and make them fantastic.”

You have been reading the fifth blog post in a series where Mike is exploring: Why is it important to develop not just yourself but also the people around you?

Building capacity is at the heart of the Service Profit Chain. If you are not familiar with the intricacies of the Service Profit chain, we have a special treat for you:

For this month only, you can download Mike’s book Best! No need to be cheap if … for FREE using this coupon JLXW8P9QSE. It is only available for the first 50 people so first come first serve.

Download the book here!

No feedback, no learning. It’s that simple.

April 13, 2022By Mike Hohnen

Imagine you were deprived of all feedback, no matter what you did you, had no way of knowing the outcome of your actions.

Terrifying, yes?

Without feedback, we have no possible way of improving what we do. We are flying blind. Everything we actually know how to do, we have learnt in incremental steps. Only by paying attention to the feedback have we been able to get better.

So as a leader, there are two implications to this that you need to be thinking about. And they concern you and ‘them’.

If you find yourself thinking from time to time that this or that person reporting to you could do better (and I know you have these kinds of thought from time to time because in my position as a coach and confidante of many leaders I hear this regularly), then you need to ask yourself how good a job am I doing in giving this person helpful feedback?

Oh come on, Mike…

I can sense you thinking… if you just knew how many times I have told that person that this or that is not working.

You may have told them. But is telling skillful feedback?

Not really, telling is probably the least effective tool at your disposal, yet it seems to be a tool of choice for many managers.

Sir John Whitmore, the creator of the GROW Model has a lovely video where he coaches a beginner in golf.

Notice that all he does is ask questions. What would you like to accomplish? How did that feel? What do you notice about your body? What would you like to do now? And slowly but surely, the power of the questions helps the novice golfer improve considerably in just a few minutes. Watch for yourself here.

What I find even more striking is the comparison with the other novice golfer who is being ‘told’ what to do by the more traditional instructor. The more he gets told, the stiffer and more awkward he becomes.

What is that telling us?

If you would like to see continuous improvement around you, you need to work on your feedback skills. If you feel team members could do better, that is valuable feedback to you. It tells you more about you than it does about them.

Next week, we will explore the other situation that is possibly even more terrifying than finding yourself in a black hole with no feedback. It is the situation where all the feedback you are getting is more or less fake or misleading, and that I am afraid is not as uncommon as you might think.

You have been reading the fourth blog post in a series where Mike is exploring: Why is it important to develop not just yourself but also the people around you?

Building capacity is at the heart of the Service Profit Chain. If you are not familiar with the intricacies of the Service Profit chain, we have a special treat for you:

For this month only, you can download Mike’s book Best! No need to be cheap if … for FREE using this coupon JLXW8P9QSE. It is only available for the first 50 people so first come first serve.

Download the book here!

If it is all about loyalty, does satisfaction matter?

April 13, 2022By Mike Hohnen

Consistency

It is true that in the Service Profit Chain framework, there is a huge emphasis on establishing loyalty; loyalty is the key driver of profit and growth.

Before we can even hope to establish a relationship that will lead to loyalty, we must ensure that we have a firm grip on the basics and that we can deliver on our promise every time. The keyword here is consistency, the key driver of basic satisfaction.

Consistency or lack of consistency is also one of my pet grievances. Consistency is the flip side of reliability. If as a customer I had a great experience last week, you as a service provider have implicitly promised me that I will have the same experience when I return next week.

If not, you are not only unreliable in my eyes, but you are also performing below my expectations, and we all know that meeting expectations is the first key to customer satisfaction.

This is a balancing act because, on the one hand, we would like to see creativity and initiative on the part of our teams, but on the other hand, we need to deliver a product that is as expected.

The name of the game is to generate repeat business. Customers return to get more of what they enjoyed the first time. If they don’t get that, then they could just as well have gone somewhere else.

Just think back for a moment about how many times in your life you had a great experience somewhere, and then went back only to find that what you had last time was not what you got the next time. Did you go back a third time just to make sure?

Probably not.

Where do you go frequently? Most probably to a place that is very consistent in some aspect of their service delivery that is important to you. That consistency is what brings you back.

Requiring consistency in the delivery process is universal across all types of services. It is the foundation of your success, and that applies to all service businesses, the way your insurance company processes your claim, the way the consultant interacts with you, how your auditing firm performs the audit. You return to the same supplier in all of these situations because you liked the way he or she did the work.

Together with emotions, consistency is an important element in our ability to recall one service experience more easily than others. You remember the consistently good experiences. They stand out. You have a much harder time remembering inconsistent experiences because you easily confuse them with all of the other inconsistent experiences that you have had.

Customers come back to experiences that consistently live up to their expectations. When that happens, we call it loyalty. Loyalty is built on consistency. Never forget that.

So take a good hard look at your basic processes, are they consistent?

This blog post is part of a series of answers to frequent questions that I get around the concept of the Service Profit Chain. In future’s posts, we will continue to explore other key points. If you would like the full concept served up in one go, you will find Mike’s book “Best! No need to be cheap if…” HERE.

What do you need to focus on if you in order to create a dream team?

April 13, 2022By Mike Hohnen

In my view, the three cornerstones in the thinking behind the concept of the Service Profit Chain are:

Customer Loyalty – as the key objective
Value – understanding the true need of the customer
Dream Team – the people that actually make it happen

We have already looked at Loyalty and Value in the previous post.

In this post, I would like to explain the 6 key ingredients in creating a dream team:

The Right People

Careful selection of new recruits. Hire for attitude. Train for skills. Coach for performance and that includes dealing with the bad apples.

Continuous Improvement

Best in class training and development at all levels in the organization. Continuous improvement is considered one of the great benefits of the job. “In this job, I grow”…

Great Support Systems

Service is not just something the frontline does for our customers. Service is our culture. Employees and managers, who do not have customer contact, service the employees that do. (Our IT department is not the IT-Police – it is an internal service department that supports the frontline in getting the job done.)

Empowerment/autonomy

The best service employees take pride in solving the problem on the spot. So the freedom to act is hugely motivating. Southwest Airlines famously tells its employees, ”You may do anything you are not uncomfortable doing to solve a passenger’s problem.”

Clear Expectations

In the same way, that anyone who has made it to a great sports team knows what is expected of them, employees in the best service organisations also know what is expected of them. It is part of their motivation to be part of a team that is not afraid to set the bar high. Candour is a key element of high-performing teams.

Appropriate Rewards and Recognition

Focusing on what works, celebrating success, and acknowledging each other’s contributions makes work meaningful.

The principles are not complicated. There is no magic involved. But it requires commitment and persistence to get it right. When you do, the benefits are amazing.

You can download the Dream Team checklist below and benchmark yourself!

Dream Team Questions

1 file(s) 1.46 MB

Download

What is the difference between satisfaction and loyalty?

April 14, 2022By Mike Hohnen

Loyalty and Satisfaction

In a world of abundance, too much of everything, what we also sometimes describe as hyper-competition, understanding the difference between satisfaction and loyalty is also the key to profits and growth.

There are many different ways of defining loyalty out there but this is my favourite one (not one invented but I can’t for the life of me remember where I found it): A loyal customer is someone who is willing to pay a bit more for your service than they would have to pay somewhere else for a similar experience.

Think about that for a moment…

If they are paying the same price to you as they would pay anywhere else, they are not loyal. It is just convenient for them to do business with you. And if they are paying less, you have just bribed them to stay with you.

So there you have it, satisfaction is manly about avoiding dissatisfaction: Delivering on the primary results in a consistent and reliable way, what Tom Peters so famously called Ho-Hum.

There is no loyalty in satisfaction. It is just Ho-Hum.

Loyalty is about a connection. Loyalty is emotional, not rational. Loyalty is Wow! You have this ‘feeling’ about a place, a product.

Just think about all the stuff that you own. Of all the things in your possession, which ones are in your eyes brands and what are just products?

It’s quite simple: A product or service becomes a brand when you have a feeling for it.

And then we are back full circle to the Service Profit Chain because things do not create emotions, people do. When I think of a certain hotel or café that I am very fond of, it’s the people. They have some people who have made an effort and established a connection with me, and yes I will gladly pay a premium for that emotional connection. It makes my day.

This blog post is part of a series of answers to frequent questions that I get around the concept of the Service Profit Chain. In future post, we will continue to explore other key points. If you would like the full concept served up in one go, you will find Mike’s book “Best! No need to be cheap if…” HERE.

What is value to a customer?

August 17, 2020By Mike Hohnen

Or, Why Value Is Not about Money.

In the old economy, the one dominated by goods, value was created through the transfer of ownership. I create or produce something; and when I transfer the ownership to you, you give me money in return. The way you check the value of what you bought has to do with the specifications. Whether you are looking for strawberries or a new car, it is about product attributes. This ‘widget’ is _______ (stronger, faster, slimmer, tastier…) than the other ones you have looked at.

In the new economy, the service economy, value is created in use.
When I rent a car, use a consultant, or search for a great place to stay for my vacation, there is no transfer of ownership. It is all about utility – I need something, and my preferred service is the one that best takes care of that need. When my need is met, it translates into a result for me. And most of us are more than happy to pay for getting the result we need.

So, if our aim is to create a great customer service experience, the starting point is to make sure that what we are offering matches the value expectation of the customer.

In order to do that, we use the Value Equation – a tool that originates from the research conducted to produce the Service Profit Chain framework. The Value Equation has four elements:

R Is for Result.

What is the result that the client is expecting or looking for? Do we understand the need? If I buy an airline ticket from Paris to Rome, and we end up in Berlin, the airline did not deliver the result that I was expecting. So, no matter how cheap the ticket is or how many drinks they serve, it is a lousy service experience. Do you book a table in a restaurant because you are hungry? Maybe. More often, you have a different need. Maybe you are looking for a special moment, an occasion to celebrate or an ideal setting for a special conversation. Whatever it is, the food is just an instrument in providing the real result that you are looking for.

This means that for every service product we create, we need to ask ourselves, “What is the result they are looking for?”

P Is for Process.
You can fly from A to B with many different airlines. In general, they will all get you to where you planned to go; but each one does it their way. The difference comes out in their process.

From a customer’s point-of-view, process has five elements. Each plays a part when evaluating to what extent the value proposition actually covered their needs.

Time: How does time play into the need or result that they have? Is it important that we are on time? Is it important that we are fast or slow? If my wife and I are having dinner before the cinema, we are looking for one kind of time experience. If we are celebrating her birthday the following week, we are looking for a different kind of time experience. Same people, same restaurant, but different situations.

Reliability: Do we do what we say we will do? Are we consistent?

Competence: How does the customer experience the competence level of our employee at a given touch point? How well do our frontline teams respond when asked a question or a request for help?

Empathy: To what extent are our employees able to see the situation from the client’s point-of-view? When a customer feels understood, we are more than halfway to solving their needs.

Proof of service: Do we provide a service that the client does not notice? Are there ways that we could remind the client that we are servicing them?

Under the fraction line we have:
$ for price and E for effort: The client pays a price for our service; but depending on the service package, they also put in more or less effort themselves. If you buy a sofa from IKEA, the price is low; but you put in quite a bit of effort yourself. If you fly Virgin Upper Class, they will pick you up at your office and take you and your stuff right to the plane; A different experience than flying Ryanair, and, to be fair, also at a different price point.

So, there you have it.
If you want to understand how customers perceive value, the value equation is your key. And, your starting point for developing a great customer experience is to understand how you tailor your customer value proposition to each segment using the Value Equation.

I would be happy to send you a copy of the Value equation at a glance – just fill in your email below.

Why the Service Profit Chain concept is more important now than ever before?

April 13, 2022By Mike Hohnen

Service Business

Check out Google trends, the interest in customer service and customer experience is steadily rising year by year and has been for the past 5 years.

Why?

Because we live in an age of abundance – this is one of my key points when I give live presentations. By abundance I mean that there is too much of everything. There are more hotel rooms, restaurant seats, cars for hire or consultants etc. than the market actually needs. So we are all trying to survive in a hyper-competitive environment.

In a hyper-competitive environment, it is not enough to try and compete on product specifications. Because within a given price bracket, the specifications for most product are more or less identical. So in order to differentiate, we need to look at the experience and that typically means that we add some service components.

On top of that, we are rapidly moving away from products and into services (Just think cars, in a few years when cars become self driving, they will no longer be products but we will see them as a service). So society is moving to service dominant logic. And when products are turned into services, the focus shifts, it is not about the product spec but the customer need.

If we want to compete on experience and service, we need to focus on the interaction between the frontline staff and the guest/customer – what we also call the touch points. That is the critical interface – that interaction can lift what is otherwise just a bland run of the mill experience into a memorable experience. And when that happens, we create loyalty. High customer loyalty is the key profits a growth.

So some companies launch major initiatives around creating loyalty. They see that as their main objective.

But that is only because they are not paying attention to the principles of the Service Profit Chain – in a sense they have got the wrong end of the stick.

There is no shortcut to the profits and growth. You need to take the long haul and that starts with creating an inspiring and engaging workplace, and that is what the concept of the Service Profit Chain can help you do – and that is why understanding this key framework is the best way to survive in a hyper competitive environment.

Check our my course The Service Profit Chain explained!

_________________________________________________

Why my fear of roller coasters does not keep me out of amusement parks

April 13, 2022By Mike Hohnen

Helix - Liseberg - Gothenburg — *Helix – Liseberg – Gothenburg*

They scare the living daylight out of me those roller coasters.

Intellectually I understand that they are safe, probably safer that taking a taxi to the airport, statistically… but still. It’s always been like that, so maybe in a previous life I was traumatised by a roller coaster gone wild. Anyway that is not the point of this final blog post of the year. The reason I mention it is because paradoxically this year I have seen more incredible roller coasters and heard more delighted shrieks from thrilled crowds than at any time previously in my life. More on that in just a minute.

Yes I am in a reflective mood.

You see, technically, this week is just like all the other weeks, but somehow in our mind it’s quite special. It marks an ending and a new beginning and we all get in this mood of yearly review and even more importantly setting new bold goals for the coming year.

All my lovely blogging colleagues are probably bombarding you with: The ten best books you should have read, the eight new trends that you must understand or (flavour of the year) the twelve point action plan that will make this your best year ever!

So why the roller coasters?

Well believe it or not, this was the year that I got to spend considerable time in amusements parks!

Seriously!

As always I have been doing work with my loyal gang of regular hotel clients, but I also got to spend time at Efteling in Holland introducing the Service Profit Chain for IAAPA. In Copenhagen, we introduced a new approach to leadership development at Tivoli gardens and I had the honour for 16 weeks to take a group of seriously enthusiastic managers from Liseberg in Gothenburg through the GROW leadership program.

So what am I learning?

I think my key takeaway this year has been confirmation that at the end of the day, being a great manager is deceptively simple on the surface, and incredibly hard to do well in practice. It’s like juggling. You see the guy rotating 5 oranges in the air and you think: “That’s neat. I can do that.” You pick up the oranges and you understand that there is a gap between knowing and doing.

The 5 oranges of management that you need to juggle have been elegantly formulated by the Gallup organisation based on their extensive research of hundreds of business and managers.

Great managers have these talents/skills/abilities:

They motivate every single employee to take action and engage them with a compelling mission and vision.
They have the assertiveness to drive outcomes and the ability to overcome adversity and resistance.
They create a culture of clear accountability.
They build relationships that create trust, open dialogue, and full transparency.
They make decisions that are based on productivity, not politics.

That’s it! But again this is just more information, and I am sure you don’t need more information.

What you need is probably execution, the HOW part.

So that brings me to next year. Early 2017, we will be launched the Team Leader’s Toolbox – a training program aimed at helping busy mangers learn quickly how they juggle their ‘oranges’.

We have been exploring this theme of Leadership and Management over the year on the blog as well and if you missed some of the posts you can download a compilation in the form of ebook HERE.

Thank you for reading my blog. If there is anything you would like to see more (or less) of next year, don’t hesitate to drop me a line. I love hearing from my readers.

_________________________________________________

This post is one of a series where we are exploring the notion of leadership and how this is different from management. Our starting point is the Service Profit Chain and the understating that the management part of our job will only take us so far. If we really want to create an organisation that is capable of delivering outstanding customer experiences, we need to develop an organisation that delivers outstanding employee experiences – and that requires leadership. You can check out other articles of the series below: