Wednesday, October 26, 2011

It Takes Just One Bad Apple....

Bad Apple
The reason I haven't posted in over a week is that my beautiful wife has just given birth to my new son. During my wife's stay at hospital she was given fantastic attention by a multitude of mid-wives (staff)... except for one. I won't go into too much detail but the rudeness of this particular staff member was disgraceful. And it was this particular mid-wife that inspired this post.

You see, this one mid-wife almost destroyed all the goodwill built up by all her fellow team. When I think about the number of staff members that interacted with my wife, i.e. doctors, mid-wives, porters, cleaners, catering etc the number easily exceeds 20 people. And yet it only took 1 person to leave a sour taste of the experience.

What strikes me is that this is not unusually and demonstrates:
a) The critical importance of a business' Front Line Staff.
b) The damage 1 can do to many.

How many times have you experience poor customer service? It is neither here nor there whether it is face-to-face or over-the-phone. It also does not matter whether it is a billion dollar bank or a small business. The reality is that poor customer service can have a material impact on the bottom line. Some facts include (Source Link A & Link B):
  1. It takes 12 positive experiences to make up for one unresolved negative experience – “Understanding Customers” by Ruby Newell-Legner
  2. A 5% reduction in the customer defection rate can increase profits by 25 – 95% – Bain & Company
  3. A customer is 4 times more likely to defect to a competitor if the problem is service related than price or product related – Bain & Company
  4. 68% of customers leave because they were upset with the treatment they received whilst speaking to customer services – US Chamber of Commerce
  5. 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1st Financial Training services
  6. A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people – White House Office of Consumer Affairs
  7. Companies that make customer service a high priority see twelve times the return on sales than those companies with a low emphasis on service - 
  8.  International Customer Service Association
Unfortunately I do not have any facts on the impact of social media i.e. Facebook, Twitter, Blogs etc particularly in the area of mass communication of poor service or experiences.

Back to the hospital! This particular hospital has four values, three of which are, Compassion, Respect and Excellence. Clearly the hospital's strategy and ability to execute were not aligned for the mid-wife in question. Like all organisations, this hospital could have a 95% (1 in 20 as stated above) success rate in employees adopting the values element of the corporate strategy however the impact of that one person literally wiped out the entire 95% achievement for us as customers.

A search on Google or Amazon will give you countless books and articles on Customer Service practices etc. Additionally there are a plethora of consultancies and training companies focused on the area of Customer Service. However for all you Execs, Managers out there always keep one simple fact in mind....It Takes Just One Bad Apple!


As a side note the forth of the core values at the hospital was Accountability. We were very impressed by the Customer Service Manager who did an exit interview with us re my wife's stay. As returning to the hospital is not in our near term plans it would be very interesting to see how the feedback we provided is used to minimize the potential negative impact of the one bad apple by living the core value of Accountability.

Sunday, October 16, 2011

Benchmarking: The Good, The Bad, The Ugly

Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. (source)

As many of you may have experienced, it is common practice for companies and/or their specific business units to undertake Benchmarking exercises, often by paying exhorbent fees to Professional Services companies to provide the required facts.

I recently came across an old video of Tom Peters discussing Benchmarking in a presentation (note: the video is at bottom of this post). Tom states, "... I hate Benchmarking! Benchmarking is Stupid! Why is it stupid? Because we pick the current industry leader and then we launch a five year program, the goal of which is to be as good as whoever was best five years ago, five years from now."

Tom has a point. And it is a good one. This is the "Ugly" in Benchmarking. There is no use setting your objective based on trying to achieve a specific measure if the reality is the best-in-class company is going to continually move the goal posts forward. This is why innovation is so important. If you only chase the leading benchmark you will always be a follower. To quote Steve Jobs, "Innovation distinguishes between a leader and a follower." Or as Seth Godin wrote, "The reason it is so hard to follow the leader is this: The leader is the leader precisely because he did something remarkable. And that remarkable thing is now taken - so it's no longer remarkable when you decide to do it."

However I do not totally agree with Tom. As the first part of the definition states, Benchmarking is the process of comparing one's business processes and performance metrics... In my view is this is critical. Obvious, but critical. I liken it to going on a journey. It is impossible to get to point B or C if you do not know where your starting point i.e. point A, is. Hence, in my view, this is the "Good" in Benchmarking as having a solid factbase about your own business (and not necessarily everybody else's)  is an essential starting point of executing any strategy.

The 2 minute video below, includes the Tom Peters quote above:

BTW. There is no "Bad". It just made for a good blog title :)

Wednesday, October 12, 2011

Steve Jobs: More Henry Ford than Leonardo da Vinci

There have been a number of articles recently comparing Steve Jobs to various famous figures, for example Steve Jobs v Einstein or Steve Jobs v Leonardo da Vinci.

However what surprises me is that I have come across very little in the way of comparisons to one of the greatest business people and marketer's of the 20th Century, Henry Ford. The reason that I am surprised is that I find considerable similarities between Apple and Ford (with particular reference to the Model T Ford).


1) Existing Concepts:

Company Product Comments
Ford Automobiles The concept of the first automobile dates to 1672.
Apple Mouse See Xerox Parc re concept.
Apple Apple Mac See: History of Personal Computers
Apple iPod Apple acknowledges the concept dates to 1979
Apple iPhone See: History of Smartphones
Apple iTunes Apple purchased the rights to SoundJam MP.
Apple iPad See: How The Tablet Computers Have Evolved

To summarise the table above, neither Ford nor Apple invented the concept related to the product for which they are famous.

2) Lack of Product Customisation:

Both Ford and Jobs are famous for not creating multiple customisations of their products in response to consumer requests.

In Henry Ford´s 1923 autobiography ‘Henry Ford - My life and work he quotes himself as saying, “Any customer can have a car painted any colour he wants so long as it is black”.

Likewise Steve Jobs and Apple haVE been criticized countless times for their strict control over their closed business model (ecosystem).

3) Mass Market Focus

Henry Ford:
"I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God's great open spaces."
Steve Jobs:
Steve Jobs and Bill Gates were interviewed at 'D5: All Things Digital' conference in Carlsbad, California, in 2007. When asked what each has contributed to the computer and technology industry Bill Gates said of Steve Jobs: “What Steve’s done is quite phenomenal, and if you look back to 1977, that Apple II computer, the idea that it would be a mass-market machine, you know, the bet that was made there by Apple uniquely—there were other people with products, but the idea that this could be an incredible empowering phenomenon, Apple pursued that dream. Then one of the most fun things we did was the Macintosh and that was so risky. People may not remember that Apple really bet the company. Lisa hadn't done that well, and some people were saying that general approach wasn’t good, but the team that Steve built even within the company to pursue that, even some days it felt a little ahead of its time—I don’t know if you remember that Twiggy disk drive and…"
4) Visionaries:

Both Henry Ford and Steve Jobs were incredible visionaries. Whether it was the Henry Fords’ foresight to create a process and production line that allowed for an affordable car or Steve Jobs remarkable ability to see the mass potential of an existing product through great design (Steve Jobs: Design is not just what it looks like and feels like. Design is how it works.) both men were visionary in their thinking and execution.


Leonardo da Vinci was an astonishing inventor and whilst neither Henry Ford or Steve Jobs invented the concepts of their most famous products,  they  (and their businesses) shared a number of characteristics, not the least being their ability to execute their vision.

Wednesday, October 5, 2011

The Speech Every Graduate or Exec Should Watch.

Today is a sad day. The world has lost an incredible innovator.

The speech by Steve Jobs below is one of my all time favorite speeches. Steve Jobs RIP.

“Don’t be sad because it’s over. Smile because it happened. — Dr. Seuss"