Archive for the ‘Engagement’ Category
Now that the turkey and pies are gone, I guess it’s time to jump back into the blog. Recapping from my last post:
- Companies who differentiate on customer experience are more likely to succeed in the face of shrinking margins and discretionary spending.
- A highly engaged customer-facing workforce will deliver a consistently better experience.
- An “Open Organizational Culture” is necessary to drive employee engagement.
So what exactly is an Open Organizational Culture? Fundamentally, it’s one that fosters transparency and accountability to its employees, customers and the public. This is in contrast to traditional organizations that operate in a hierarchical model with an authoritarian culture that seems to foster privacy or secrecy.
An Open Organizational Culture has several unique characteristics:
Transparency and Open Communications
Leaders of high performance organizations nurture a culture that allows for people to question openly and have honest dialogue. They create a climate of candor throughout the organization. They remove the organizational barriers — and the fear — that cause people to keep bad news from the boss. They understand that those closest to customers usually have the solutions but can do little unless the organization encourages open discussions about problems. When people can raise objections when when necessary (and without reprisal), it paves the way to higher engagement.
In an Open Organization, the leader’s beliefs and values create the direction and the boundaries that people need to perform well. The values are clearly defined & communicated, and reviewed periodically for relevance. More importantly, the organizations practices, systems & processes are clearly aligned with the values and management ensures that employees’ day to day experiences are consistent with the values. You can quickly identify an organization that does not adhere to its stated values by gauging the level of cynicism amongst the staff. Open Organizations really walk the talk and it is reflected in their employees’ attitudes.
Empowerment in Organizational Culture
In “Good to Great” (2001) Jim Collins asserts, “good-to-great companies built a consistent system with clear constraints , but they also gave people freedom and responsibility within the framework of that system.” Open Organizations not only actively engage members of the workforce, they rely upon their contributions to on-going improvement. Driving Empowerment and responsibility down to the lowest appropriate levels within the organization, especially to the customer-facing members, has many benefits:
- It provides employees the opportunities and incentives to shape the company experience. Encouraging involvement in this way fosters a feeling of ownership on the part of employees.
- It promotes organizational creativity which leads to innovation. As I stated above, customer facing associates are typically the ones with the best insights regarding the customer.
- It allows decisions to be made without unnecessary or authoritarian approval process which can lead to a more responsive organization.
- Encourage continuous learning which in turn improves decision making.
So in summary, an organization’s culture is shaped by and reflects the values, beliefs, and norms held by its founders, leaders, and organizational members. In Open Organizations, values are aligned and honored, transparency and open communication are the norm and decision-making is informed by a process of continual learning. Cultures that embody these characteristics demonstrate them in the organization’s structures, standards, policies, and systems. They shape the work environment, staffing practices, and organizational performance, all of which influence the employee experience and by extension, the customers they serve.
If this sounds like your organization, great. I’d love to hear about it. If not, I’m curious about that things you see are barriers to getting to an Open Organization.
[image: Open 24 Hours on Houston Street]
Looks like Circuit City is finally developing the four island Second Life estate that was purchased back in May ’07. As some of you may know, I was in charge of the Second Life project before my job was cut, so I’m really interested to see if what they build follows the strategy that I proposed.
IBM developed a Circuit City store on IBM10 last December which generated a good deal of press, but like most corporate sims, its usually empty now. The store was never really intended to be a permanent home for Circuit in Second Life. It was primarily for demonstration purposes to allow IBM to showcase what could be done for retailers in SL. The content of the store has not changed at all in the last six months and there has been no effort to develop community engagement at the store, primarily due to contractual hurdles with IBM (its their island).
As a starting point for planning a larger SL presence for Circuit City, I did extensive research on early real world brand entries, speaking with counterparts in other companies as well as marketers, branding experts and others. It didn’t take long for me to come to the same conclusion of many prominent Virtual World observers:
Most real world brands just didn’t understand how to approach the medium.
It would not be appropriate to reveal details of the strategy I proposed as Circuit has not done so and it may not be what they are going with in the end. I will say that the strategy leveraged lessons learned from other real brand builds and was specifically designed to promote engagement on several levels. I have not been in contact with anyone from Circuit since I left, but from the 30,000 ft. view on the map display, they seem to be close to an announcement.
I was pleased to see that Wharton’s Jay H. Baker Retail Initiative along with Canadian consulting firm, the Verde Group, had conducted the second of what is now an annual study of retail customer dissatisfaction. If you are a regular reader, you know I have written about this before. The big takeaway from this year’s study is that the most impactful area of dissatisfaction comes from interactions with the sales associate.
The study found that disinterested, ill-prepared and unwelcoming salespeople lead to more lost business and bad word-of-mouth than any other management challenge in retailing.
Of the 1000 shoppers surveyed about their most recent shopping experience, 58% indicated that they had either been unable to find an associate to help them or were outright ignored by the sales associate. The survey identified a number of other sources of dissatisfaction including inadequate parking and out of stock product, but shoppers were much more likely to forgive these problems than they would bad sales help.
As identified in last year’s Consumer Dissatisfaction Study , customers are much more likely to share a bad experience than a good one. Half of all shoppers have chosen not to visit a particular store because of someone else’s bad experiences. According to Wharton marketing professor Stephen J. Hoch, director of the Baker Initiative:
“The importance of consumer dissatisfaction, rather than satisfaction, is the fact that a negative experience leads people to want to go and talk it. They are less apt to talk about it when things go well.”
The study also revealed differences in attitudes based on age with the coveted 18-29-year-old demographic reporting the highest number of bad experiences. The key reasons: Lack of authenticity, lack of knowledge and inability to find things due to a disorganized store.
The study also gathered information regarding the types of characteristics that would be found in an ideal sales associate. The top two were “engager” (willing to stop whatever they are doing to help) and “educator” (someone who can explain products, make recommendations, etc).
Both last year’s and this year’s studies should be required reading for anyone in retail today. After you read what shoppers are saying, give some serious thought to how your sales associates are interacting with your customers.