Mike Hohnen

Coaching for personal growth, change and development

Service Profit Chain

Great Team Leaders understand the difference between respond and react

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Summary of React or Respond


For the full version watch the video or listen to the audio as you prefer


In every situation there is a space, and in that space you have a choice. The choice to react or respond.

Victor Frankel wrote:

Respond or React will position you above or below the line

Above the line and below the line is also the difference between responding (above the line) or reacting, which immediately puts you below the line. When we are hijacked by our emotional system, we automatically fall into the trap of the drama triangle. And we choose a role for ourselves. When we choose a role for ourselves, we at the same time try and push the people around us or the circumstances of whatever into one of the two other roles to get the drama triangle going. And as we mentioned last time, this only serves the purpose of creating a lot of emotional friction, hot air, whatever you like. But it never leads to any constructive solutions. As long as we are caught in the drama triangle, we have no possibility to, create anything meaningful or useful. We just go round and round in circles like cats chasing our own tails.

List to your own language

Try and listen for your own language and notice how your own language will determine whether you are starting a new drama triangle or whether you already are responding and trying to pull the whole conversation into a completely new sphere above the line where we’re outcome-focused, constructive and trying to find solutions. And if you can manage that, and if you get good at that, then you’re going to see how people love to work with you.

Catch up on previous posts

Previous blog posts in this series on Team Leadership Skills and working above and below the line:

Leadership skills every team leader needs to master

As a leader do you have the courage to examine your mindset model?

Feeling right you are probably wrong

Great team leaders do not get sucked into the drama

Mike Hohnen, MBA is a coach, trainer, author and public speaker who supports leaders, managers and their teams in implementing the principles of the Service Profit Chain.

Great cultures are created with principles not rules

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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.

If you would like to change your culture, start a new conversation

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Often teams say to me: “We need to change the culture around here.” And they often have a point, because toxic cultures are very powerful and can often destroy all sort of great initiatives – and as we have seen in a previous post, culture is a huge part of engagement. But it also easily becomes a fluffy excuse for not doing anything. It’s another drama triangle where the big villain is the culture and we are just the victims of this culture. “Well you know, that is just the culture around here. There’s not much we can do about it.”

But how does culture emerge? What creates the culture?

If you use the four quadrants we introduce in this blog post, then culture is influenced by:

– The attitude and behaviour of each individual

– The system or physical setting that we operate in.

If you are having a meeting with someone, the physical set-up has an influence on how the meeting unfolds. We could have the boss behind a desk looking down on the other party, or we could move to a sofa or we could even go for a brisk walk around the park. Each of these physical systems would obviously create a different feeling in that meeting. And if we run most of our meetings in a certain way … that creates a culture.

(I am known for insisting on having round tables or just circles of chairs for my workshops, and some people think I am being a bit silly in insisting ad nauseum about this. But I know from my 15 years’ experience that the setting creates a different feeling. It sets the tone. And when I am with a new group for the first time, this is the first step in creating a culture. A culture of conversations.)

Another aspect of culture is that, at the end of the day, our culture is the sum of the attitudes and behaviours that are present in our group over time. So first of all, each person needs to ask themself a crucial question: “In what ways am I contributing to this culture that I possibly don’t like?”

Secondly, how does each person behave? What they do and how they do it contributes to the culture. The more dominant or influential someone is in a group, the more their behaviour influences the common culture. This means that top management is key to the culture. After a few years, the culture becomes a mirror or reflection of the values and behaviour of the top person or the top management team.

So what can you do as a management team to influence the culture?

First, be very aware of your behaviour, including what you focus on, what you notice and comment on etc. All these things are cues that the organisation picks up and uses to try to decode what the culture is.

Secondly, change your conversations. More than anything, our culture becomes what we talk about. Take a look at your meeting agendas (and meeting formats) and think carefully about the conversations that you participate in during the day. What are we talking about?

But maybe more importantly, what do we never or very rarely talk about?

I spoke to a manager the other day who had just joined a large service organisation. He told me that when he was recruited, he was told all about the very customer-centric values the company has and how “we always put the customer at the centre of what we do”. “But,” he said, “I have been here for 6 months now and I have not had one single conversation about the customer experience. Every meeting is about financial KPIs. That is all we talk about.”

So, what do we need to introduce into our conversations if we would like to shift the culture? Where and when are we going to make the time and space for that conversation? Those are the crucial questions.

<<<<  >>>>

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.

The employee experience needs to adapt to the employee life cycle

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The classical way to define the employee life cycle is: attract, recruit, onboard, develop, retain and transition. But that is the HR perspective, not the employee’s perspective. And as good service designers, we know that we need to consider the perspective of the ‘customer’ or user if we are going to be successful with our journey/experience design.

The life cycle will vary from industry to industry and of course from employee to employee. So good experience design would require that we do more research on this, in order to understand what it looks like in our case.

But here is what it might look like from an employee’s perspective.

Is this for me?
Attracted to a job proposition and wondering if it is for me.

Will I make it?
Entering into the application, selection, interview, and final negotiation process.

I made it!
The excitement of being chosen and starting the new job. Flooded with new impressions and ‘firsts’.The lunch canteen is amazing. Loving the attention I get as a newbie. (Or so one hopes.)

Am I good enough for this?
The first feelings of being overwhelmed. Am I good enough for this? Imposter syndrome. Do I belong here? Is this really for me? Feeling very much outside my comfort zone. Should I bail out and limit the damage?

Challenging but do-able
Feeling more secure in the saddle. Challenged and on the edge of my comfort zone, but in an exciting way. Giving the job everything that I have, and enjoying it.

Cruising – no sweat
The daily routine sets in, and most of what I do is well within my comfort zone. (Canteen is not nearly as nice as when I started.) Engagement may start to regress, through lack of challenges.

Is this it?
The first doubts start creeping in. I am always well within my (now shrinking*) comfort zone. This is no longer meaningful for me

From here there are two options: change your job or stagnate completely.

Experiences are all about managing customers’ emotions, as we have seen in previous blog posts on the subject of Service Design Thinking. The same principle applies to employee experience design. We need to understand the emotions that the employee is going through at each stage of the cycle.

When we review the above life cycle it becomes clear that the overall principle we need to look at is where people are in terms of comfort zones. Growth and development are keys to engagement and enthusiasm. But learning and growth happen just outside our comfort zone. We have the misconception that if we do the same thing for a long time we will get better and better at it. Not true. Research shows that, if anything, we stagnate or regress*. (Could you pass a driving test today? Probably not. See what I mean?) In order to get better we need to challenge ourselves and make a deliberate effort to improve. On the other hand, if we get too far outside our comfort zone we trigger fear, and then all learning and development stops as we move into “fight or flight” mode.

Engagement is essentially the product of the accumulated emotional experience. It is what we in a service profit chain terminology would call content. It is different from context (environment, salary and work conditions), which forms the basis of satisfaction but does not produce engagement. We can all have tricky and less than satisfying days, just as we can have fabulous days. But over time the key to engagement is: is this meaningful for me overall? Do I regularly find that I am at the edge my comfort zone, in a constructive and challenging way?

So the key to engagement and retention is to create an environment where the employee can safely switch back and forth between “challenging but do-able” and “cruising, no sweat” modes.

When looking at the employee life cycle in this way, it also becomes clear that as a manager you have a huge responsibility to know where your employee is in the cycle, and to do what you can to support that person in the best possible way. And that may even include helping an employee to move on to a new and more challenging position, if you have no more challenges to offer.

 

Why culture is not enough to save your employee experience

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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

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Converting knowledge to wisdom

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“What use is it to have a bellyful of meat if one can not digest it? If it cannot transform us, if it cannot improve us and fortify us?”

Wrote Michel de Montaigne back in the 16th century in one of his many rants against a French school system that “requires you to just parrot back everything you are told”.

So how do we actually convert knowledge into leadership wisdom?

The key word here is experience, experience not as in breathtaking customer experience, but learning from experience.

Because we all agree that we learn from our experiences, or do we?

If you have ever made the same mistake twice, you will have to agree that we do not consistently learn from our experiences.

When then do you learn from your experiences?

Elementary my dear Watson: Whenever you take the time to reflect on your experiences, you make deeper learning possible.

Reflection can be a personal reflection, or it can tackle the form of a team reflection.

Our reflection can be a surface reflection:

  • What happened?
  • Which actions were taken?
  • What were the consequences that we observed?

Or we can choose to do a deep reflection:

  • What did I learn about myself through this experience?
  • What are we learning about how this team functions and handles conflict through this experience?
  • What broader issue can we see arising from this experience?

Surface reflection helps us understand past actions and behaviours. Deep reflection helps us examine underlying beliefs and assumptions.

Both are important. But even more important is to start developing a practice of reflection. Make a habit of having a regular end of day/week or month reflection session with your team. Develop a personal particle of reflection. The best way to do that is to start a journal and spend just 10-15 minutes a day noting down your answers to:

  • What has been my focus today?
  • What have I observed?
  • What am I learning?
  • What will I focus on tomorrow?

Now your are on track to convert knowledge into wisdom.

BestThis blog post is the second in a series of blog posts 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!

What is our biggest challenge when we map our customer journeys?

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Customer Journey

The short answer to that is that we are deeply biased. Despite all our good intentions about delivering superb customer service, we time and again end up seeing the situations from our own point of view. And using that point of view, we make assumptions about what we think the customer is experiencing. But unless we actually walk in their shoes, we have no clue what they are experiencing.

I see this time and again when I give workshops that introduce Service Design to groups of service providers. In order for them to really understand what this is about, I let them try it for real. So we pretend that they are a group of city tourism planners that need to improve the tourism experience in our city. In order to do that, I let them choose a persona situation and set up their hypothesis (or assumption) for this experience.

One team of three said that navigating the Copenhagen subway is very hard if you don’t speak Danish. Another team of three had the assumption that tourists easily pick the wrong kind of restaurants and end up in the tourist traps. And other groups pick other similar situations that they felt had some problems seen from a tourist point of view. So we sent them out for a 3-hourr field study. Armed with just their iPhones, we asked them to bring back proof in the form of pictures or recorded testimonials that confirmed their basic assumption (so that we could start working on ideas for improvements).

So what happened?

None of the teams could prove their assumption to be correct, none. What they thought a tourist experience was like (here in their own home city) was nowhere near what the tourists said they experienced.

So then I had to ask them: So how many of the assumptions that you have made about how your customer experience your service do you think are accurate?

Food for thought: How can we test our own assumptions about our own service product?

The same way as we did with the tourists. We get out of the office and we observe, document and collect lots of testimonials in the actual situations (not post-experience 6-page surveys, please). With that raw data, we can now start truly talking about what we need to do to improve our various touchpoints.

If you don’t have the time or inclination to do that ground work, your next best solution is to ask a group of students (Anthropologists or service designers) and have them do the real-time observations for you.

Map out the guest journey. Record your assumptions at the critical touch points: “Our breakfast is the best in town.” or “Our meeting facilities are perfect.”; “Guests think our coffee shop has the perfect selection.” Now ask the researchers to prove you right if they can.

Don’t forget: Assumption is the mother of all f… ups.

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 is the difference between service levels and service standards?

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Service levels and standards

A key part of implementing the Service Profit Chain’s thinking is to work on consistency; in order to do that, we need to have a clear understanding of what the difference is between service levels and service standards.

The easiest way to understand this is to look at a few examples.

Many independent restaurants have high levels of service. But they may not have high standards. On the other hand, McDonald’s has a relatively low level of service, but has very high service standards, while Ritz-Carlton hotels have both high levels of service and high standards of services. And the greasy spoon down the road has neither service levels nor high standards.

 

Service Levels.001

Standards are all about consistency. We do things in a certain way, always. Levels of service are all about how much time and effort you put into the delivery process.

Many independent restaurants and other small service businesses go out of business because they lack service standards. Their delivery is inconsistent and creates confusion in the marketplace.

Our level of service needs to fit with our overall value proposition. How much service does this customer segment need and are they willing to pay for it?

Understanding this is crucial to building loyalty.

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.