Employee loyalty

Great cultures are created with principles not rules

January 25, 2019By Mike Hohnen

Source: Netflix -https://www.slideshare.net/reed2001/culture-1798664

‘Another, customer complaint!’ thought the manager. ‘And what a stupid one at that. Some of our people just don’t get it. We will have to create a new rule for this kind of situation.’ And so he does. Up goes the memo on the information board, where it joins quite a few other new rule memos.

But rules only work when we can clearly define the situation and set clear boundaries. However, what we are looking for in our customer experience is personalisation. We want employees who are flexible in their approach and who can think on their feet. And with as few boundaries as possible… If there is one thing a customer hates, it is hard boundaries. ‘Sorry, sir that is not my section. Please ask your waiter.’

When we analyse why we create rules, it is not because we have a problem with the top performers. The top performers use their own good judgment to solve situations, which are typically also the situations that lead to praise and four-star reviews on social media. It’s the bottom 30% of the crew who need rules.

The more rules we create, the less room there is for good judgment.

The solution to the customer complaint is not to create another rule. It’s performance management, but not in the form of making a note for the yearly appraisal meeting, but here and now feedback and coaching. And, ultimately, if we have team members who don’t get it, they should not be on the team.

We can never create enough good rules to cover every situation. And even if we could, that would still not be the solution. Because top performers hate rules. What drives their engagement is autonomy, being able to use their own good judgement from situation to situation. And if you take that away, they will find somewhere else to work, a business where good judgement and personal initiative are appreciated.

But how will new employees know what good judgement looks like in our context?

This is where principles come in. Principles are the fabric of a great service culture. Principles frame what we believe around here. Principles are the foundation for our decision. Nordstrom, the US retail giant, has a very simple approach:

“Use your best judgment in all situations. There will be no additional rules.”

Southwest Airlines tell its employees: “You may do anything you are not uncomfortable doing in order to solve a passenger’s problem.”

Obviously, some people have better judgment than others. But that means that performance management is not about enforcing the rules but about helping people make better decision – and ultimately weeding out those who just don’t get it.

Get rid of the rule book and start thinking more about what should be the guiding principles.

This spring we ran a series of blog posts around development, developing yourself and others. We have collected and edited those blog posts into a simple e-book that you can download below if you would like to explore this subject further.

Why culture is not enough to save your employee experience

January 25, 2019By Mike Hohnen

*The four quadrants of the employee experience*

Last week I argued that culture is an often overlooked and important part of the employee experience – and it is.

However, having a great culture is only part of the story – as we all well know, we can’t suboptimise ourselves to greatness.

A great employee experience is not about how high a fuzzy-feel-good factor you can score. It’s about sense making and meaning. Is this meaningful to me or not?

When things are meaningful, we thrive; when things become meaningless, we suffer.

When you look at it this way, it becomes clear it is not enough to make part of the employee experience pleasant. It is not about the free fruit or great lunch service. That is also important, but it’s also just another part – the same way that our culture is only a part of the whole experience.

So, if we recapitulate.

We are striving for high levels of engagement. Engagement emerges from an individual feeling of motivation, enthusiasm – call it what you like – but it is something that starts on the inside of an individual and it is influenced by the three other parts: culture, physical environment (system) and the job that we get to do (and how we are allowed to do it).

This is the very simple explanation why it is so incredibly difficult to achieve consistently high levels of engagement. If you are not hitting all the elements more or less perfectly, there is no engagement.

We can have exciting challenging jobs, but in a horrible culture that is not meaningful for very long. We can work in the loveliest of cultures, but where ‘nothing seems to really work around here’. That is also not meaningful. And, finally, we can build these beautiful work environments with lovely cultures, but everything is so controlled, right down to how I am supposed to do every little detail, and that is not meaningful either.

And, to top it off, we must, of course, mention the fourth variable – the individual. None of this works the same for everyone. Each individual has their preferences and their ideas of what is meaningful to them.

So, if you have a day where you feel frustrated that you have tried everything to create a great workplace, don’t despair! Getting it right is really hard, but if you manage to do so, the pay-off is amazing.

How is that for a meaningful challenge?

If you are interested in exploring what it takes to develop engagement you are welcome to download my free e-book here

SaveSave

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

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.

How is customer value created? And who does it?

April 13, 2022By Mike Hohnen

Service

In a previous question, we looked at what value is to a customer, how they calculate it in their mind if they received value or not. In this post, we will look at how and by whom is the value then created?

If we go back to the basic definition of service, then we know that Service = Result – Experience.

The experience part is relatively straightforward. We need to provide a good experience at all the touch points and most reasonably successful service organisations understand that.

We can get back to how to do this in a future post. But what truly separates the great from the good is their understating of the result bit.

If I walk in to a store to purchase a hammer of a certain size and make, and I leave the store with exactly that hammer then it is relatively easy. My primary result was to purchase a hammer and that is what I did.

But what is the result that I am looking for when I have a two hour layover in an airport? Or what is the result that I am looking for when I as the CEO organises an offsite meeting for my top ten managers at a conference center? What is the result I am looking for when I check in to a hotel?

The mediocre service providers assume that it is the primary product that is the result. The bed to sleep in. A conference room with a projector etc. But that is not the point. The hotel bed is the solution to a need, and the need may be a good night sleep. The conference room is the solution to a need that could be about undisturbed workspace with no distractions.

When I say ‘could be’, it is because we can’t be sure. Most of these service needs are highly subjective and individual.

So we have two choices. We can give everybody the standard solution and hope that it covers some or most of their needs. Or we can take pride in discovering what the real result is that they are looking for and deliver a customised solution.

When I explain this during my Service Profit Chain seminars, I often hear grows of protest at this idea: “But we don’t know. How on earth should we know what the need behind a conference room booking is other than they obviously want a conference room? We have hundreds of guests each day, how are we to understand what each and everyone’s different needs are. How are we going to do that?”

It quite simple: Ask!

Initiate a conversation that tries to explore and uncover what the need is behind the request for a product. Just like your doctor does. You don’t go to your doctor and say hey could you give me a box of the blue pills, they were wonderful last time. No, your doctor will investigate, and question and use his intuition and experience in order to determine what he thinks is the real need. Once that is identified, he prescribes the best product to solve the need.

That is exactly what our best service providers do as well. What makes them outstanding at their craft is that they investigate, question and use their experience and intuition in order to understand what the real need is. Once they understand that, then they use their professional expertise and knowledge of their product to propose the best possible solution to exactly that need. And funnily enough, that always creates an exceptionally happy customer. Go figure.

If it is a complex service delivery then it requires a lot of time and effort. If it is a simple service delivery, it’s easier to do. Here is a simple example:
Two people come into our restaurant and ask for a table for two. Seated, we give them the menu and let them know we will be back shortly. We come back. They order. Food arrives. They eat, pay and bye bye. Standard solution, that was the product the client asked for. they were not unhappy you could claim.

Let’s rewind.

Two people come into our restaurant and ask for a table for two. Seated, we give them the menu and ask so have you been here before? Their answer will give us valuable information about what’s next to say (Do they need help in understanding our restaurant concept / menu or do they know it well and need help to learn about new initiatives specials etc.?)

Then, we ask casually: So you look really happy tonight are you celebrating something? With a bit of luck, we get some really valuable information back:
a) Oh no we just escaped from the kids and we are off to a movie (Meaning they are on a limited timeframe and we need to adapt to that.)
b) Yes we are actually. It’s my wife’s birthday today. (Meaning they are here for the evening and they would like it to be special somehow. Just sticking a flare in their dessert is already a much better experience than the standard solution we started with if you get my point.)

A skilled service provider will ensure that they not only have the evening they dreamed of but they will probably also spend more than they would have if we had not had this opportunity to really understand their need. The better we understand the more values we create.

And that brings me to favourite peeve. I am not mad about the expression ‘Up-sell’. It sounds like we are force feeding them more than they need. But I do encourage the service sale, which is the sale you make once you have understood that here is a deeper need than what was originally voiced by the customer. By letting them spend more on achieving their real need, you are giving them fantastic service.

So how is value created? By uncovering the true need: Understanding what is the real result they are looking for and then customising your delivery to fulfill that need in the best possible way.

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.

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:

Progress drives engagement – So how do you focus on progress?

December 27, 2016By Mike Hohnen

Progress

Of all the things that can boost emotions, motivation, and perceptions during a workday, the single most important is making progress in meaningful work. And the more frequently people experience that sense of progress, the more likely they are to be creatively productive in the long run. Whether they are trying to solve a major scientific mystery or simply produce a high quality product or service, everyday progress, even a small win, can make all difference in how they feel and perform.

The Progress Principle

This quote which makes so much sense to me brings us to another aspect of not just why we need to focus on developing the people around us, but also how we can do it.

Focus on progress

In order to progress, we need a baseline to progress from. Once we have a baseline, we can start thinking about what we need to learn or practice in order to get better.

For learning actually to happen, there must be a gap between your current capability and the results that you desire.

So in order for our people actually to learn they need to:

Have an awareness of the gap
Be willing to declare their incompetence (I don’t know how to do that.)
Commit to learning

(I have written about this in a previous post some time ago.)

So if I sneak into your business and tap any one of your team members on the shoulder and ask them: “What are you working on at the moment in order to get better?”, or I ask them: “In what ways does your boss feel you have made progress last month?”, do they know?

Or is progress something that is randomly observed and then celebrated: “Oh look isn’t this nice!”?

Focusing on progress is an important part of your leadership role. And your most important tool for this is not a dashboard in excel but conversations, one-on-one conversations (According to Gallup research, team members who have no or very few one-to-one sessions with their direct supervisor are 67% more likely to be disengaged at work. I mention this just in case you have the notion that one-on-one is a waste of time and it is easier to tell them all at once.)

If you happen to be a manager of managers, this is even more import – you are the role model. If you are not having one-to-one conversations (about progress) with your direct reports, there is little chance that they are having them with their team members. In fact, if you are not talking to them about how they are progressing with their approach to manage progress with their team, I am pretty sure it is not happening at all.

How to structure an engaging conversation

What would be a good way to structure these conversations?

Establish the gap. Once we have a gap, we can establish a goal. Moving toward our goal is what progress would look like. Then we can have a chat about so what is going on now compared to that goal. Once we agree on how what is going on is different from the goal, then we can talk about what options there could be in order to make progress towards the goal. Finally, we pick an action and commit to doing that.

The following conversation will be a follow up / feedback on how this is going. If you are familiar with coaching, you will have recognised that what I have described here as a framework is in fact the GROW coaching model – you can check it out in more details HERE.

In any case, in my upcoming course The Team Leaders’ Toolbox, we will be exploring this model more in details. If you would like to be notified when we launch that, sign up with the link below!

Enter your email address below and we will notify you when we launch the Team Leader’s Toolbox!

__________________________________________________________________

Who gets the last chef?

December 27, 2016By Mike Hohnen

Who gets the last chef?

That was the title of my presentation for a group of managers last week. The title was inspired by a number of conversations that I have been having with clients during 2016. (You can substitute ‘Chef’ for the type of critical position that is part of your current reality.)

Reflecting on those conversations, I realised that there has been a common thread through most of them.

They have all been concerned with:

The lack of bench strength on their management teams
The scarcity of new talent

On a day to day basis, this is not so obvious, and therefore it’s not a high priority; but it hits them every time a key team member needs to be replaced. First, they realise that there is no obvious no.2 who has been groomed for the job. Secondly, when they start the search, they quickly understand that there is not a lot of talents available out there.

Problem is that once they realise this, it’s a bit late to do much about it other than pray…

And honestly, are they going to get the cream of the crop in that situation? Probably not. Most likely, they will get what is left over. It’s like purchasing a second hand car. You are essential taking over someone else’s problem.

Why?

Because the smartest of your colleagues out there have understood the problem a long time ago and have been working strategically with their HR development.

They don’t start thinking about who is going to replace the head chef on the day that he resigns.

They have a strategy to be the preferred employer in their area and an important part of that is a proactive strategy for succession planning. That means that when they recruit or promote someone to the position of, say sous-chef, they ask themselves does this person have the potential to become a chef one day, or is this just a good cook who just might make it as a half decent sous-chef? If that is the case, we have created a problem with a time release.

Part of being a preferred employer is being recognised as an organisation where employees can learn, develop and grow. And in order for that to happen, someone needs to take charge of developing, coaching and mentoring.

If you are a manager, that someone is you.

But this is an actually quite challenge for most managers. In fact, it is one of six key challenges that managers have in common across borders, hierarchies and professions, according to research conducted by the Center for Creative Leadership.

Developing, coaching and mentoring team members also happens to be one more of the leadership attributes that our current series on defining management and leaderships is about.

So let’s start off by understanding how do people actually learn and develop in the job situation?

According to a much quoted piece of research also by the Center for Creative Leadership*, lessons learned by successful and effective managers are roughly:

70% from challenging assignments
20% from developmental relationships
10% from coursework and training

The authors of the research explain it like this:

Development generally begins with a realisation of current or future need and the motivation to do something about it. This might come from feedback, a mistake, watching other people’s reactions, failing or not being up to a task – in other words, from experience. The odds are that development will be about 70% from on-the-job experiences – working on tasks and problems; about 20% from feedback and working around good and bad examples of the need; and 10% from courses and reading.

We can support learning and development through courses and training sessions, absolutely, but at the end of the day, it can only be support for what is actually going on in the day to day job situation. That is where the real learning takes place; which is why the immediate manager plays such a key role in the development of team members.

In the coming blog posts, we are going to explore this crucial leadership competence and what you need to do in practical terms.

*Lombardo, Michael M; Eichinger, Robert W (1996). The Career Architect Development Planner (1st ed.). Minneapolis: Lominger. p. iv. ISBN 0-9655712-1-1.

Enter your email address below and we will notify you when we launch the Team Leader’s Toolbox!

__________________________________________________________________