Focus on the Customer
Why should customers have to rekey their data over and over when buying something?
Why does an employee need four levels of approval for a simple order of office supplies?
How did we become such nincompoops? Will it ever stop?
John R. Brandt, CEO and founder of The MPI Group and an award-winning journalist, has devoted more than two decades to studying leadership in effective, purpose-driven organizations. In his first book, NINCOMPOOPERY: Why Your Customers Hate You-and How to Fix It, he leverages research across thousands of companies to show leaders how to find and kill the corporate stupidity that drives customers crazy. More importantly, he offers concrete examples of how any organization—large or small, and regardless of industry—can innovate in ways that delight customers and attract top-level talent. I recently spoke to John about his research.
“Time and again I find that the biggest obstacle to leading change is the leader. Not because he or she is UNqualified, or UNmotivated, or UNpopular, or any of the other UNs you might think of; instead, they fall victim to the biggest UN of all: UNconfident. This is the worst reason not to start or lead change.” – John R. Brandt
For those who haven’t read your book, what is Nincompoopery?
Each of us is a nincompoop at least occasionally; just ask your coworkers, or your spouse. But Nincompoopery is something different: it’s the corporate stupidity that drives customers crazy, and keeps everyone—customers, employees, managers and business owners—from getting what they want. It’s what happens every time you expect a company’s service or product or process to work, but it doesn’t—and nobody can seem to fix it, even though everybody knows what’s wrong.
This Nincompoopery happens all the time in our lives and our businesses, with issues both small and large. For example, have you ever taken your car to get fixed, been inconvenienced for several hours while you waited, only to discover on the drive home that the repair was done badly or not at all? Not only do you have to take the car back; you also have to wait all over again as the car gets fixed a second time, or else drive an unsafe vehicle. You’re irritated, the shop loses money, the mechanic’s boss is frustrated, and the mechanic is told that he or she is a nincompoop, or at least feels like one.
But it’s never the nincompoop, it’s always the Nincompoopery. Because if the repair shop had bothered to train and trust the mechanic on more than just technical skills—e.g., process improvement methodologies or the revenue and profit implications of his or her work—then he or she might have created an innovative way to review his or her work (a checklist, maybe?) to prevent sloppy errors and wasted time. Satisfied customers would feel more confident in their repairs, the shop would make more money, and the mechanic wouldn’t look or feel like a nincompoop.
“The average life expectancy of an S&P 500 company used to be seventy-five years, but today it’s fifteen years.” -John R. Brandt
Diagnose the Source of the Problem
Some might say that you have somewhat shifted the blame from individuals to organizations, or as you put it, from nincompoops to Nincompoopery. Others may read this enthusiastically, thinking, “Yes, it isn’t me, it’s the system,” and yet you wouldn’t let them off the hook that easily, correct?
Not at all. The point is that when things like this go wrong, there is no nincompoop problem; instead, there’s almost always a much larger Nincompoopery problem, in the way that a company has failed to understand, design, and deliver customer value in ways that satisfy customers and boost the bottom line. Even worse, the fix to a Nincompoopery problem is almost always not unknowable or impossible, but is instead easy to spot and simple to implement. Yet most of the time nobody—not employees, managers, or senior leaders—seems capable of overcoming tradition, inertia, and apathy to make simple changes that would save money and improve customer experience (and, ultimately, increase revenues and profits). Instead, most companies (and most employees and leaders) continue to do the same irritating things, in the same irritating ways, day after day, despite knowing better. Everybody in the company is to blame—and everybody is responsible for fixing it.
“In the real world, of course, change is not easy, and resistance is not only common, but to be expected. Why? Because while everyone says that they want change, they usually only like it if it means that nothing will be different, and if they don’t have to work very hard at it.” – John R. Brandt
Why is this becoming more prevalent?
Mostly because it’s fundamentally more difficult to lead an organization than ever before, due to a confluence of leadership trends and external factors. Think about the amount and speed of change we’re wrestling with: The number of internet users reached 3.9 billion in 2018, roughly half the world’s population. Yet even as we connect people and the world’s population rises 7 percent between 2010 and 2020, the number of working-age employees will actually decline in many industrialized nations. No wonder we have skills shortages! And even when we’re connected, we’re often dazed and confused: with more than six billion smartphones projected worldwide by 2020, we’ve succeeded in creating an environment in which we and our employees can, if we want, work 24/7, checking our phones as many as 150 times per day. We think we should be more productive, thanks to all this connectivity, but research says we’re not, and that the biggest lie we’ve sold ourselves is the myth of increased productivity via multitasking. In fact, we lose up to 40 percent of our productivity by switching between tasks; the more we switch, the worse our performance.
And that’s only scratching the surface of everything we’re trying to manage in this brave new world. I don’t think it’s surprising at all that employees and managers feel overwhelmed, which often leads to paralysis—and Nincompoopery.
“Silent defectors kill your bottom line: it’s five to twenty-five times more expensive to find a new customer than to retain an unhappy one.” – John R. Brandt
What Leaders May Get Wrong
What do leaders often get wrong when they think of innovation?
Many of them have little understanding of what innovation actually means. They tend to think of innovation as a shiny new product or service that incorporates a major advance in technology—something like the Model T or the iPhone. Advances like these are exciting and rearrange entire industries, but they come with an important caveat: this type of innovation is the most dangerous (and impractical, and nincompoopish) to pursue for most organizations, for three reasons.
First, game-changing innovation is rare in the grand scheme of things. Of the 30,000 new consumer products launched each year, roughly 5 percent succeed. Why? Because it takes an enormous amount of money to find a truly revolutionary technology or product. Bringing a new prescription drug to market, for example, now costs nearly $2.6 billion and can take more than a decade. Even a simpler product like the SpinBrush, which entered the market priced at $5 each, required an upfront investment of $1.5 million. Most companies—especially the 75 percent of all US companies with less than $1 million in annual revenues—will never be able to invest enough into research and development to deliver a revolutionary innovation based on technology, except through dumb luck.
Second, even if you’re lucky enough to come up with a major technological innovation, your timing has to be exactly right. If your innovation is too late—after a competitor has already launched a similar technology, even if it’s inferior—then you might as well not launch at all, unless you have buckets of money to spend out-marketing the other guys. Nike entered the wearable fitness tracker market in 2012 with its FuelBand, supported by a world-class brand, significant advertising, and functional advantages. Unfortunately, it didn’t have the market share head start enjoyed by Fitbit (launched Tracker in 2008) and Jawbone (launched UP in 2011). As a result, Fitbit held 68 percent market share through 2013 versus 19 percent for Jawbone and just 10 percent for Nike. By April 2014, Nike was waving the white flag by laying off most of the FuelBand’s development team.
On the other hand, if your innovation is too early—before customers see a clear need and payoff in adopting a new technology—you’re in even more trouble. When the Segway was introduced, the company predicted sales of 10,000 per week—at $5,000 each. Unfortunately, as cool as a self-balancing, motorized scooter may be, most people couldn’t imagine why they needed one. Segway ended up lowering its prices and focusing mainly on police, industrial, and tourism markets—and sold 24,000 over the first five years (or roughly 2,576,000 fewer units and about $13 billion less in revenue than expected), at lower margins.
Finally, no matter how much you’ve invested in developing a new technology, you should plan on spending even more to launch and market it, because business history is full of great products torpedoed by underfunded launch plans. Barnes & Noble launched the Nook e-reader in 2009, and reviewers raved about the technology, but consumers followed the bigger brands and, more importantly, the marketing dollars of the Apple iPad and Amazon Kindle Fire, as well as offerings from Samsung and Google. The Nook sadly illustrates the fallacy of the ever-popular (but always-nincompoopish) Field-of-Dreams product-launch strategy: “If we build it, they will buy.” No, they won’t. In fact, they’ll stay away in droves.
“CareerBuilder reports that 41 percent of US firms lost more than $25,000 from a bad hire in the last year.” – John R. Brandt
How Leaders Think About Innovation
So how should leaders think about innovation?
Leaders at great companies think about innovation in different ways, driven by a deep understanding of what specific customers really value. What leaders at these organizations have learned is that while customers love new products, services, and technologies, they often appreciate other components of customer value even more. This is an important distinction and one that’s often difficult to convey to managers and employees trapped in customer-free zones (executive row, the back office, the factory—any place that doesn’t have regular contact with real people who buy stuff from you.). The traditional, outdated way to think about customer value is that it involves something we make or do or offer—adding value to work in process, offering a product to an end user, delivering services or information. All these activities might be components of customer value, but by themselves don’t constitute customer value in its modern context.
This is critical. In industry after industry, customers are turning to companies that focus on innovation through a simple lens: How can we make our customers’ lives simpler, happier, less stressed, and more productive, by removing or solving multiple issues with a single solution? I learned this years ago from a friend who owns an advertising agency; he said that the secret behind all great marketing for professional services firms could be compressed into five words: “Me smart, make you rich.” The secret to modern customer value requires six words: “Me smart, make you less stressed.”
60 percent of US households experienced at least one instance of “customer rage” in the past year. Yet 56 percent of those outraged enough to complain got nothing—nada, zilch, the big goose egg—in return for their terrible service. – John R. Brandt
You start your section on talent cynically. Do you believe most corporate leaders think about talent that way? If so, is there any hope for change? If you do encounter leaders who truly think like this, how do you navigate through them to achieve lasting improvement?
I had a lot of fun with the start of the chapter on talent. But I don’t believe that most corporate leaders intend to think cynically about their workers, or to treat them as interchangeable parts in some slow-moving Nincompoopery machine. But experience shows me that there are many, many companies at which, for all of their pious pronouncements about the value of employees and how they want their workers to be partners, they don’t really treat employees as partners. In fact, at some of these organizations, managers treat employees as the exact opposites of partners: enemies, saboteurs, malingerers, complainers, whiners … basically, nincompoops.
Is it any wonder that everybody—employees and leaders alike—dreads coming to work at these places?
I like to ask leaders to consider how they’d actually treat a business partner. You’d typically share information, decision-making, and the rewards of your joint success with a partner. Yet only 7 percent of private companies share financial data with all employees, and a staggering 76 percent share no financial information with employees. It comes down to respect and fairness, and many leaders fail the test.
Not surprisingly, those companies that do pass the test—by training and educating their employees, by empowering them to make meaningful decisions about operations and customers, by paying a fair wage and also sharing financial rewards through bonuses or incentive programs—typically outperform their competitors significantly. It turns out that being an employer of choice isn’t just a nice thing to do, it’s also the smart thing to do.
How has technology helped improve process? Are you seeing more examples trending in the right direction or sliding in the wrong one?
I’m incredibly hopeful and encouraged about the opportunities for companies of every size to leverage improvement methodologies and get better; we’re seeing increasing adoption of standard methodologies such as Lean, Six Sigma, etc. across multiple industries and sectors. If these companies do it right, it will help to reduce the amount of Nincompoopery that all of us either endure or inflict.
But as you alluded to, what’s happening with technology AND process is even better. One of the most encouraging business developments of the new century is the democratization of process opportunities with customers—specifically, the availability of new techniques and new technologies to improve processes at businesses large and small. This is NOT about Lean, or enterprise resource planning (ERP) software, or analytics; it’s about social media. Why? Because at its root, process is about communication: sharing information, collaboration, and problem-solving skills and ideas. Social media provides an affordable platform for any company to include customers in process improvements and problem-solving.
A great example is JetBlue, a long-time user of Twitter to communicate with individual customers in transit, with a dedicated staff monitoring the company’s feed. A customer might report a flight cabin that’s too hot, or an unstaffed gate; regardless, JetBlue responds in real time, solving specific problems and fixing recurring issues. The airline’s costs for leveraging social media are low, but the investment delivers high value to individual customers, even as it generates a halo effect of goodwill among the rest of the company’s Twitter followers. In a sense, the company asks for customers to help it improve processes and outcomes in real time, highlighting JetBlue’s responsiveness to everyone on Twitter. That’s a win for everybody.
When You Feel Trapped
What should individuals do who feel trapped in a culture of Nincompoopery?
It comes down to your circumstances, and what kind of life you want to lead. There are many people who have to stay in their current jobs or situations, regardless of how Nincompoopery-addled their company is, because they need healthcare, or have some other pressing personal reason that makes change impossible, at least for now. I feel for them. Yet the vast majority of people do have a choice: Start fixing the Nincompoopery around you—or quit. Both are scary; there’s no guarantee you’ll be able to get others to collaborate and try to fix the Nincompoopery that’s making your lives—and those of your customers—miserable. But the bigger risk, both economically and emotionally, is staying. Companies die from Nincompoopery all the time, slowly and painfully, and the jobs at those companies die, too—which means you could spend years being miserable, only to find yourself unemployed and with a terrible company at the top of your resume. And even if the company or your job doesn’t die, how do you want to spend the 90,000 hours that you’ll invest in work over your lifetime? Clocking in every day just to hate your company, resent your coworkers and customers, and despise yourself? That’s not a path to happiness, for either the organization or the individual. Do something hopeful and meaningful. Start trying to fix the Nincompoopery—or leave.
80 percent of irritated customers stop buying after a single bad experience, and 82 percent tell everybody they know.
How Middle Management Leaders Can Advance
What about middle management leaders who want to fix things but also feel trapped. How do they advance the goal?
The good news is that there’s hope. The bad news is that fixing Nincompoopery requires much more than just training, or fixing a broken process, or installing a new technology. Any time we lead change in an organization we have to manage not only those technical components, but the accompanying social aspects as well. Paul Lawrence, a sociologist and professor at the Harvard Business School, wrote that “what employees resist is usually not technical change but social change—the change in their human relationships that generally accompanies technical change.”
This is critical for middle managers to remember: the resistance that you encounter in leading change—whether from your bosses or your workers—is not usually or mostly about the change itself, but about their anxiety. That anxiety usually correlates closely with three primal needs: Security, Relationships, and Meaning.
For security, people need to feel safe. They need to know that their incomes and their persons are secure, and that change won’t increase their level of worry or insecurity in the long run. It’s helpful, too, if you can truthfully outline how, in a best-case scenario, change could actually increase their security and comfort. Unfortunately, during change, you may not be able to guarantee security.
For relationships, people need to know that their feelings, relationships, and social status will be considered during change, even if they can’t be fully preserved or protected in their current states. Given a chance, people are generally reasonable and understand that during change, their roles and relative statuses may evolve; this is uncomfortable, but can be accepted if they know that they will be respected.
For meaning, ten thousand years of human experience teach us that that once we know that we’ll survive, and that our relationships with others are secure, we almost always turn our attention to meaning: What is my life about? In asking this question, most of us seek to find how our existences connect to something larger, something that imbues our lives with purpose beyond daily struggles for security and social respect. For most people, that primary meaning can be found in some combination of faith, values, family, and community. But a secondary longing for meaning relates to the reality of our schedules; given that most of us will spend roughly a third of our waking hours at work for roughly half a century, we naturally hope that our work will engage us, support our longing for meaning, and serve a purpose deeper than merely providing security for us and our family. We want those years to mean something more than just time served.
Anytime you lead change, you need to pay at least as much attention, maybe more, to all three primal needs of your employees, colleagues, and bosses. If you do, you’ll have an excellent chance for success. If you don’t … Well, you’d better resign yourself to continued Nincompoopery. And nobody wants that.
For more information, see NINCOMPOOPERY: Why Your Customers Hate You-and How to Fix It .