The Secret to Higher Profits in a Digitized World

The Decline of Customer Satisfaction

Customer satisfaction is going down, not up.

How can that be in a world with unprecedented technological progress?

 

“A brand is the sum of the good, the bad, and the off strategy.” –Scott Bedbury

 

Tema Frank founded Web Mystery Shoppers International, the world’s first company to test omnichannel customer service. Her new book, People Shock: The Path to Profits When Customers Rule , shows off both her decades of business experience and the research from interviewing over 150 business leaders. She developed a formula to help businesses improve the customer experience in the midst of a digitized world.

I recently asked her about her research.

 

“The key to getting work done on time is to stop wearing a watch.” –Ricard Semler

 

What is PeopleShock?

As we automate more and artificial intelligence wipes out jobs, the smaller amount that is left for human to human interaction becomes critical. Companies that are people-focused (while using technology to support those people) are the ones that will win in an era of increasing competition and social media power. If you get the people side right, PeopleShock is your key to success. Ignore it and your company will soon be history.

 

“If you’re too busy to build good systems, then you’ll always be too busy.” –Brian Logue

 

Get the 3Ps of Profit Right

Please share your 3P Profit Formula with our audience.

Customers are cranky, and they’ve got more choices than ever before. So you’ve got to keep them happy, and that means getting all of the 3 Ps of Profit right:

Promise – Having a clear aspirational, inspirational and memorable reason for doing what you do inspires staff and customers. It also gives staff a filter for decision-making: Would their action be consistent with the company’s promise?

People – Business success comes from connecting effectively at a human level with people inside (staff) and outside your organization. Outsiders include not only prospects and customers, but people we sometimes overlook, like suppliers, distributors, lenders, investors, media and the public.

Process – As time goes by, some of the processes that got you to where you are stop making sense.  To deliver consistently great customer experiences, you have to regularly re-assess how you’ve been doing things. Start by looking at processes from a customer point of view. What do they experience? Then look at how that lines up with what you do internally.

 

“CEOs are the ones who must conduct the corporate orchestra.” –Tema Frank

 

How does this translate into higher profits?

How to Increase Profits Through Gender-Balanced Leadership

The Power of Diversity

It’s not just the right thing to do.

Diversity is organizational rocket fuel. It’s better decision-making. It’s better results.

I’m always studying what works, what doesn’t, and the latest thinking in this area.

That’s why Melissa Greenwell’s new book, Money on the Table: How to Increase Profits Through Gender-Balanced Leadership, got my attention. Melissa is Executive Vice President and Chief Operating Officer of national retailer The Finish Line, Inc. Her new book utilizes current research and demonstrates that more women in management equals better financial performance.

I reached out to her to talk about her research and her perspective. Her views are intriguing and offer a view worthy of discussion and consideration.

 

Study: more women in a group increases problem-solving and decision-making.

 

The Case for Gender Diversity 

For those who aren’t up to date on the latest research, tell us why gender balance is good for organizations. What’s the case for gender diversity?

Hardwiring in the brain is different for men and women. The physical differences are associated with natural tendencies in thinking, communicating, and problem solving that are all needed in business. Men and women demonstrate these traits in varying degrees. Organizations that have traits from both genders will get the best questioning, debate, and idea generation resulting in healthier strategies and increased performance over those who don’t. Those are the organizations that will create the best products and services for their customers.

 

Fact: Public companies with more than 1 woman on the Board have higher returns.

 

Why do some resist it?

I don’t believe people resist it. I believe leaders don’t know what to do to change it. That’s the biggest reason I wrote the book – to provide some actionable advice as to what leaders can do to effect change.  Others have brought awareness and that’s a good first step. Now we need to start doing the things that will lead to more gender diversity in leadership positions.

 

Study: Companies with no gender balance on the board have lower market capitalization.

 

You say that you wrote the book mainly for men in power because they can change the ratio. And then you say some “get it” and some “think about it.” What’s the difference?

I wrote the book mainly for people in positions of power – anyone who is in a senior leadership role can effect change faster. At this time, the vast majority of those people are men.  Of the male leaders I interviewed, I found that there are two main groups: those who “get it” and have been taking steps for several years to have more women in leadership, and those who are “thinking about it” – that is, they acknowledge that women are important to their business but are struggling to find ways to have more of them in senior leadership.  The biggest difference between these two groups of leaders is that those who have greater gender balance in their organizations have taken some very deliberate steps to get them there. They take more time to seek candidates and they reach outside their known network to find female candidates. They tend to take more risks on up-and-coming talent within their organizations as well.

 

Reasons Companies Fail to Keep Women

It’s not only recruiting but also retention that is important to changing the ratio. What are some of the reasons organizations fail to keep women?

Some organizations still refuse to implement the flexibility it takes to keep female talent. They still view creating flexibility as making exceptions rather than viewing it as a competitive advantage. They are busy counting hours instead of measuring results. Those that continue to think that way will fall behind in the war for the best talent.

 

What’s unconscious gender bias and how do you recognize and deal with it?

Unconscious gender bias is continuing to hire people who are just like us (male or female) and not even thinking about the ramifications of doing so. Little to no thought is being given to examining the gender balance of the team or organization when this continues to happen. The only way for it to change is for the top leader to set the tone and lead by example. Everyone follows the lead of the CEO or President, which in itself is far more important than implementing awareness initiatives.

 

Steps for Building Gender-Based Leadership

How to Create Repeatable Success and Endless Encores

Repeating Success

 

Ever feel frozen in place?

Have you seen something take off and then get consumed with worry about what’s next?

How do we create an encore worthy of that success?

 

Ken Goldstein’s new book, Endless Encores: Repeating Success Through People, Products, and Profits, tackles the difficult topic of creating continued, repeatable success. His various corporate roles make him uniquely suited to share his perspective on success. Currently, he is Chairman & CEO of SHOP.COM and previously he was Executive VP of Disney Online and Publisher of Broderbund.

 

“All success resets expectations for what comes next.” -Ken Goldstein

 

How to Create Repeatable Success

You wrote a fictional story about a topic that seems to haunt many: repeating success. Why did you choose this topic?

I think there are two challenges that weigh heavily on our minds at work: first, how do we achieve success, and second, once we achieve some success, is that the last success we are going to have? In many senses, the second challenge is much more haunting than the first. When we’re initially trying to break through the noise and get noticed, we have nothing to lose, so our leaning toward risk is high and our openness to the unusual is ungated. We are open to helping others, and we welcome their help because together we are stronger. Once we have a reputation of any kind, fear starts creeping into the mix. No one wants to be a one-hit wonder, but often we become our own worst enemy and unintentionally box ourselves in. We worry about our next thing being compared to our last thing. That worry can filter our creativity, our bias to action, even our kindness toward others as competitiveness takes over. None of that negativity helps us win again at all, it just clouds the way forward. That’s why I chose this topic. So many people I know are consumed by it, overwhelmed by it, and sometimes frozen in place. The colleagues I’ve helped in person in a leadership capacity have continued to move forward with the new, and I thought if I could capture that spirit of innovation in a story with real characters, I could inspire others to keep looking forward and only forward.

 

“Leadership is earned and recognized, not granted.” -Ken Goldstein

 

Why We Learn More From Failure

Why is success difficult to repeat? After all, if you did it once, you can follow the same process . . . or not?

Ken GoldsteinHere’s what I have discovered repeatedly: You can almost never recreate a success, but it is absolutely predictable that you can recreate a failure. That’s why we learn more from failure than we do from success. In failure, we learn what not to do again. It didn’t work, so put that on your list of things you don’t need to try again. In success, if we do the same thing again, or even a modest alteration, we will not create the same inventiveness or excitement that we did with the original. Something can only be unique once, and success is usually unique. That’s why it is so hard to repeat success, because no matter who you are, no matter what you’ve done, all that is in the past, and you must start from zero. It’s also why I say you’re not really failing if you’re learning, because the learning is what sends you back to try again. When we embrace the empowerment and humility of starting over, releasing defensiveness and facing the blank canvass with a set of trusted colleagues, we have the best shot at repeat success, which is the same shot we had at first success. Accept that and innovation is all you need to worry about (and that’s plenty).

 

“Offer customers more than what they think they want.” -Ken Goldstein

 

Build a Mission That is More than Words

What’s the best way to have a mission that is “more than words”?

When a company’s mission statement is in a binder on the shelf or buried in the company handbook, it’s dead text — it means nothing and empowers no one. Shared values are what drive people to work together and innovate. A set of shared values allows a mission to be more than words, but only if those around us embrace the values with authenticity and conviction. We live in a cynical world where conflicting data and untested opinions are communicated broadly in real time. If we say “our people are our most valuable asset” and then lay off 20% of our staff because of a bad quarter, was that a shared value? If we say, “We cherish integrity here,” and then our CEO resigns for unexplained reasons around a publicly broadcast compensation scandal, what happened to our commitment to integrity? Walk the walk, lead by example, and you can get the people around you to rally to any cause you share, but you must share it as a set of consistent actions (emphasis on “consistent”), not a slogan.

 

“Long-term leaders spend the majority of their thinking about talent.” -Ken Goldstein

 

3 Steps to Building a Winning Team

Leadership Lessons From the Unusual Story of Market Basket

An Uplifting Corporate Story

We often read stories about corporate greed, about slimy executives, about profits at the expense of people. These stories grab headlines because they hit a nerve and fuel anger. I have never read a story quite like We Are Market Basket: The Story of the Unlikely Grassroots Movement That Saved a Beloved Business where employees and customers joined together to demand the return of a fired CEO.

The story may be unique, but it offers powerful lessons and insight into the changing nature of how we view corporations and what we expect as employees.

I recently spoke with the authors, Daniel Korschun and Grant Welker, about this story.

 

Loyalty is Demonstrated Every Day

This story has so many powerful lessons. One of those is about loyalty. What does the We Are Market Basket teach us about loyalty?

Arthur T. and much of the senior management team have been extraordinarily successful at engendering loyalty. But loyalty at this company tends to be viewed as a two-way street. Employees – they call themselves associates – we speak with tell us that they feel loyal to the company and top management because they feel a loyalty to them from that top management. So what we see at Market Basket is people who are reaffirming their commitment to each other over time. The result is these very strong bonds we see. The lesson for managers is that you can’t expect loyalty without making a sacrifice yourself. You’re not going to gain loyalty just by changing the pay or the job responsibilities; it’s something that has to be demonstrated every day.

 

“You can’t expect loyalty without making a sacrifice yourself.”

 

A Respect for Others

Why did Arthur T. inspire such passion and loyalty?

Arthur T. is beloved as the CEO largely because he gives all associates, customers, and vendors respect. He says explicitly that no one person is special at the company, and from what we’ve seen he walks the walk.

But it’s also important to point out his place in the protest. Bringing back Arthur T. was the central demand of protesters, but in our view, they were fighting to save the company’s culture. Reinstating Arthur T. became the critical step in making sure that this New England institution continued to serve those who have known it for years, and sometimes for generations.

Market Basket 

A Lesson for Boards and Corporate Leaders

What does the Market Basket experience teach boards of directors?

Most business schools today teach that the fiduciary responsibility of directors is to look after the interests of shareholders. However, this idea is simply not supported by the corporate code in Massachusetts and many other states. The code states explicitly that the board is to be a steward of the corporation, which includes customers, employees, shareholders, and others. We need to hold our boards to this higher standard.

Leadership lesson: A corporation’s duties extend beyond shareholders to the broader community.

 

A Commitment to the Community

Pick the Low-Hanging Fruit to Improve Productivity


Many leaders are looking for the “big” program that will change the game.  They agonize over large scale change efforts, ways to reduce costs, and how to increase innovation within the firm.

What if the answer wasn’t identifying one large project but instead was small issues that employees already knew about?  If the employees had the courage and the power to act on them, what would happen?

It’s the same in business as it is in life.  The little things matter.  Add up the small changes and the daily disciplines and you have mapped the road to success.

 

“The important thing is not to stop questioning.” -Albert Einstein

 

Jeremy Eden and Terri Long are the Co-CEOs of Harvest Earnings, an advisory services firm. They have helped companies like Heinz, PNC Financial, Standard Register and The Schwan Food Company, Energy East, Webster Financial, and Standard Register to reduce costs and increase revenues. I recently had the opportunity to talk with them about their new book, Low-Hanging Fruit: 77 Eye-Opening Ways to Improve Productivity and Profits. 

This is one of the most practical and immediately actionable guides for business leaders that I have ever seen.

 

Embracing Change

 

You have listed numerous ways to make an organization more efficient, more productive, and more profitable.  When you consult with an organization, do managers readily embrace your ideas or do they resist?Low-Hanging Fruit

If we said to our clients’ employees, “Folks, here are 77 new behaviors you need to do now,” there would be mutiny!  So instead we build in the most important behaviors into a process that we provide called Idea Harvest™.  Most managers do readily embrace the process because they see that it is a way for them to get their ideas not only a hearing but a decision as well.  By going through an Idea Harvest™ managers just naturally adopt our ideas without anyone having to learn or accept 77 ways of behaving.  One of the most loved new behaviors is to use simple one-page summaries for most ideas and to stop creating big presentations.  Since most decisions in an Idea Harvest are simple (“low-hanging fruit”), no lives need to be wasted on creating elaborate PowerPoints.

 

“PowerPoint has consumed the best years of too many young lives.” -David Silverman

 

Another example is that an Idea Harvest uses many short deadlines.  Deadlines focus everyone on important activities and give them permission to ignore unimportant ones that might otherwise waste their time.  Some embrace this new behavior immediately because they see that it also means decisions will be made quickly.  Others don’t see how they can meet the short deadlines until they see how efficiently they can work following some of the other rules … which is a perfect segue to the next question!

lowhangingfruit_memes_rd2_10

Know When Good Enough is Enough

I love the concept of “gold plating.”  Would you explain it and give an example?

Gold plating, also known as “paving the cow paths” is an effort to make something better that is already good enough … and more specifically, spending time making that thing better does not grow profits.  The most prevalent example is the one we describe in Chapter 77 “Mom Should Have Said, Don’t Always Do Your Best.” Managers spend an incredible amount of time perfecting PowerPoints, memos, and emails when “good enough” would have saved time that could be spent on truly important activities.  Many bosses inadvertently encourage this behavior by pointing out meaningless typos or formatting issues in internal memos.  We worked with one client where the employees laughed when we said the senior team would review a one-page summary of their ideas.  They needed to hear directly from the CEO that he didn’t want a full blown presentation for every idea they were going to discuss!  We worked with another where the word went out to reprint hundreds of pages of team reports in bigger font after the CEO made an off-hand comment that the type size was small – luckily the CEO caught wind of this and told everyone he preferred using his reading glasses to wasting time and money!  One engineering department was designing equipment that would last 75 years even though with new technology that standard no longer made sense. “Gold plating” occurs in every large company and is seen as virtuous instead of the resource stealer that it is!

 

“A bad system will beat a good person every time.” -W. Edwards Deming

 

You talk about “embracing conflict” and that can require some serious culture change inside an organization.  How do you change the culture to accept healthy conflict?

Managers bemoan how hard it is to change a culture, but we have seen it happen practically overnight.  Think how quickly a culture can change when a company is bought and merged.  The top dog has culture change within his or her power (but like Dorothy who didn’t know she only needed to click her heels three times, they often don’t know it.)  Company executives who want their teams to embrace conflict must embrace it themselves.  Is there a decision that has lingered because two factions can’t agree on the right course of action?  Executives should adopt the mantra that “everyone is entitled to their own opinions but not their own facts” (courtesy of Senator Daniel Patrick Moynihan).

 

“There seems to be some perverse human characteristic that likes to make easy things difficult.” -Warren Buffett

 

In practice, this means demanding facts before entertaining debate and discussion.  By making sure that everyone agrees on the facts, many conflicts will  be resolved.  In one company, the business line wanted a 24-hour call center because they “knew” that good customers called at all hours while the call center “knew” that staying open overnight was not worth it.  Together, they devised a simple data collection plan and determined that few good customers used the call center late at night.  Again working together, they found a way to form a skeletal staff to take care of the customers with 3am needs.  With common facts, a decade old conflict evaporated.  With facts, conflicts also lose much of their political edge that can turn decisions into power struggles.

lowhangingfruit_memes_rd2_2

One additional simple change can make a huge difference:  Get everyone involved in a decision in the room at the same time.  No serial meetings with differing points of view that the boss is left to figure out.  Ask the conflicting parties to present a single point of view on the issue and 95% of the time they will do it.

 

“There is nothing so useless as doing efficiently that which should not be done at all.” -Peter Drucker

 

Making Meetings Effective

How do you make meetings more effective, less time consuming, and more impactful?