…At The Outer Edge of Your Comfort Zone.
As we wind down 2010, many of us are reflecting on what we accomplished in 2010 and what changes we will make to continue our successes into 2011. In my own work with small and medium businesses as well as non-profit organizations, managing change is the most common topic of conversation; and why not? The uncertainty that remains in the economic and political environments have leaders in the unenviable position of making the next right strategic decision in the face of all this uncertainty.
How do leaders mitigate this uncertainty enough to make the crucial decisions before them? While there are many moving parts to a successful business strategy, two elements of leading any organization is understanding the general environment you are competing in as well as knowing how your current capabilities match up to that environment. Key to a leader’s strategic thinking process includes a recurring assessment of their general environment against six different factors: Demographic/Psychographic, Economic, Political/Legal, Socio-Cultural, Technical and Global. Regardless of whether you lead a global organization or do business directly with the government, all six factors will influence your ability to adapt and evolve your business. As I briefly outline each factor below, ask yourself how they impact your business, non-profit or corporation.
• Demographic/Psychographic – we are already seeing debates around the impact of the new census results and the changing demographics of the US population. Psychographics reflect the personalities, values, attitudes and lifestyles of the population.
• Economic – while the recession may be over, businesses generally are still taking a cautious road ahead having a direct impact on the economic recovery. As you assess your own organization’s economic health, how did your supply chain and value chain fare as well?
• Political/Legal – all eyes are on Washington DC these days to gauge the impact of Congress’ decisions and how they influence the current level of cautiousness across the business landscape. How are current federal, state and local budget gaps impacting your organization?
• Socio-Cultural –We see more and more organizations hiring temporary workers, even in management and other predominantly white-collar positions. How “Green” is your organization?
• Technical – an article in the 12/20/10 Wall Street Journal opines how Dr. Seuss would love the e-Readers because they enable children to read more effectively. While technology is changing at a rapid pace, is it effectively advancing the way you conduct your business?
• Global – you may not be a global business, but events around the globe impact your business instantaneously. Have you figured out how and why?
While understanding the general landscape provides today’s leaders with a current view of their external environment, it is only useful if put in the context of their business. The tool most often used for this aspect of the strategic thinking process is the SWOT (Strengths, Weaknesses, Opportunities and Threats) Process. This assessment of the internal environment captures the current capabilities (strengths and weaknesses) and puts them in the context of the external environment (opportunities and threats). While the SWOT is a very versatile tool used to help leaders proactively deal with changes in their business, they must keep in mind it only provides a one-shot view of a moving target and must be used routinely to be effective. Additionally, because we identify an organizational strength through the SWOT process does not mean the strength represents a competitive advantage.
We know change is inevitable, but growth in our business because of the change is not. Leaders must constantly assess which way the winds of change are blowing and adjust their strategy accordingly. I am reminded of the closing scene in The Truman Show when Jim Carrey’s Truman finally makes it to the outer edge of his known world. After a brief dialog, Truman opens the door, literally and figuratively, to a whole new world of possibilities. When you get to the outer edge of your comfort zone, are you prepared to open the door to your new possibilities?
Lead Well!
Thursday, January 6, 2011
Your Mission...
…Should You Choose To Accept It
Many of you recognize this line from the Television series or movie (or both depending on your generation) called Mission: Impossible. I recently had the privilege of delivering the Keynote Address to a group of military veterans at a career transition event the day after Veterans Day. The theme of mission is one our military veterans clearly understand so I and the other speakers leveraged the same theme throughout the event. It also provides the theme for this issue as we head into the holiday season.
Last month, we talked about information overload and its impact on a leader’s ability to make knowledgeable decisions. I would submit having a clear sense of mission is just as important to making meaningful decisions as it creates the tangible importance of making the decision to begin with. When a leader loses the understanding of importance, the overall mission begins to falter. We see organizations in many corners of our environment that have lost their sense of mission. In recent years we have seen examples of government, financial, religious and educational institutions with documented lapses in their sense of mission.
So how do leaders renew their sense of mission? They must first ask themselves why do they exist. Corporations, Entrepreneurial ventures and Not-For-Profits all exist for a defined purpose. The second question every organization must ask is, “Whom do they serve?” We use the word “serve” specifically because it creates the mindset of service as opposed to asking, “Who do we sell to?” or “Who is in our market?” Whenever I work with clients whose business has leveled off or hit a plateau, I always start with some variation of that same question. In answering the question of whom they serve, they renew the line of thought creating the guidelines for their organization or business.
The sense of mission also implies the entire organization is engaged to effectively complete the mission. Leaders must be able to effectively communicate the mission to their teams and herein lies part of the challenge – they may not know how or they overestimate their ability to do so. A recent survey by Developmental Dimensions International and published in the Wall Street Journal suggests managers struggle with the necessary skills necessary to execute a sense of organizational mission. Of the 1,100 respondents, only 36% felt they were strong in coaching their teams while only 34% felt they were strong in gaining commitment from their teams. Lastly only 32% mentioned delegating as their strength. These types of blind spots can cause an organization’s leaders to lose their way. Leaders cannot accomplish the mission alone and thus must be able to not only communicate the goals of the team but also the purpose as well. The goals address what needs to be done, the purpose addresses why the goal is important to the organization.
What separates the great leaders from everyone else is their sense of mission and the personal accountability they have to the mission and those they serve. As we head into the holidays and time for reflection, what mission will you choose to accept?
Lead Well!
Many of you recognize this line from the Television series or movie (or both depending on your generation) called Mission: Impossible. I recently had the privilege of delivering the Keynote Address to a group of military veterans at a career transition event the day after Veterans Day. The theme of mission is one our military veterans clearly understand so I and the other speakers leveraged the same theme throughout the event. It also provides the theme for this issue as we head into the holiday season.
Last month, we talked about information overload and its impact on a leader’s ability to make knowledgeable decisions. I would submit having a clear sense of mission is just as important to making meaningful decisions as it creates the tangible importance of making the decision to begin with. When a leader loses the understanding of importance, the overall mission begins to falter. We see organizations in many corners of our environment that have lost their sense of mission. In recent years we have seen examples of government, financial, religious and educational institutions with documented lapses in their sense of mission.
So how do leaders renew their sense of mission? They must first ask themselves why do they exist. Corporations, Entrepreneurial ventures and Not-For-Profits all exist for a defined purpose. The second question every organization must ask is, “Whom do they serve?” We use the word “serve” specifically because it creates the mindset of service as opposed to asking, “Who do we sell to?” or “Who is in our market?” Whenever I work with clients whose business has leveled off or hit a plateau, I always start with some variation of that same question. In answering the question of whom they serve, they renew the line of thought creating the guidelines for their organization or business.
The sense of mission also implies the entire organization is engaged to effectively complete the mission. Leaders must be able to effectively communicate the mission to their teams and herein lies part of the challenge – they may not know how or they overestimate their ability to do so. A recent survey by Developmental Dimensions International and published in the Wall Street Journal suggests managers struggle with the necessary skills necessary to execute a sense of organizational mission. Of the 1,100 respondents, only 36% felt they were strong in coaching their teams while only 34% felt they were strong in gaining commitment from their teams. Lastly only 32% mentioned delegating as their strength. These types of blind spots can cause an organization’s leaders to lose their way. Leaders cannot accomplish the mission alone and thus must be able to not only communicate the goals of the team but also the purpose as well. The goals address what needs to be done, the purpose addresses why the goal is important to the organization.
What separates the great leaders from everyone else is their sense of mission and the personal accountability they have to the mission and those they serve. As we head into the holidays and time for reflection, what mission will you choose to accept?
Lead Well!
Monday, November 15, 2010
Information is Knowing a Tomato is a Fruit…
…Knowledge is Knowing not to put it in a Fruit Salad.
In a previous edition, we discussed the relationship between Information (organized data) and Knowledge (information in context). I bring it up again not to highlight the contents of a fruit salad, but to highlight a much more crucial issue for leaders – timely decision-making. In my work with leaders, we describe the first two steps in the decision-making process as 1) Identify the Issue and 2) Gather and Analyze Information. The decision-maker must properly define the scope of the problem, situation or challenge in enough detail to create tangible alternatives. They must also gather the right amount of the right information to make a knowledgeable decision. (click here to continue reading)
Information overload is not a new challenge. Lucius Annaeus Seneca was a Senator and Adviser under Nero in the early part of his reign. Seneca was a prolific letter writer whose thoughts, insights and convictions were well read throughout the literate Roman Empire. Even in his day, he noted the issue with connectedness by observing “the danger of allowing others – not just friends and colleagues, but the masses – to exert too much influence on one’s thinking”. Without mentioning these words were written around the time of Christ, you could easily assume it was written recently.
To the decision-maker, it is no longer just a task to find the relevant information to use, but to weed out and discard the unnecessary information and do it at the speed of competition. No easy task when the amount of information available to us doubles every 9 – 10 minutes (depending on which study you read). The proliferation of Twitter, blogs, Facebook and texting contributes to this informational tsunami. They also create a greater challenge analyzing the volume of information as messages become shorter and cryptic (Twitter reports over 2 billion tweets a month) at the same time ensuring they are factually correct. We now get billions of messages just to tell us someone, somewhere created a message earmarked for us to read. Last month, AT&T sent 1 billion such messages over its network up from 400 million a month 11 months ago.
As I look at the impact this phenomenon has on our decision-making process as leaders, I see less contingency planning due to the instantaneous nature of technology and less reflection on the meaning of information to create sustainable knowledge. I recently observed a customer in a local Subway sandwich shop dictating multiple orders to the person making the sandwiches. After each order he went back to his phone for the next order. I wondered to myself if that person were in a business environment and had to remember multiple facts, would that be his way of managing information?
Seneca wrote “Elite, literate Romans were discovering the great paradox of information: the more of it that is available, the harder it is to be truly knowledgeable. It was impossible to process it all in a thoughtful way.” As leaders striving to make effective knowledgeable decisions about your business, how many tomatoes are in your fruit salad?
Lead Well!
In a previous edition, we discussed the relationship between Information (organized data) and Knowledge (information in context). I bring it up again not to highlight the contents of a fruit salad, but to highlight a much more crucial issue for leaders – timely decision-making. In my work with leaders, we describe the first two steps in the decision-making process as 1) Identify the Issue and 2) Gather and Analyze Information. The decision-maker must properly define the scope of the problem, situation or challenge in enough detail to create tangible alternatives. They must also gather the right amount of the right information to make a knowledgeable decision. (click here to continue reading)
Information overload is not a new challenge. Lucius Annaeus Seneca was a Senator and Adviser under Nero in the early part of his reign. Seneca was a prolific letter writer whose thoughts, insights and convictions were well read throughout the literate Roman Empire. Even in his day, he noted the issue with connectedness by observing “the danger of allowing others – not just friends and colleagues, but the masses – to exert too much influence on one’s thinking”. Without mentioning these words were written around the time of Christ, you could easily assume it was written recently.
To the decision-maker, it is no longer just a task to find the relevant information to use, but to weed out and discard the unnecessary information and do it at the speed of competition. No easy task when the amount of information available to us doubles every 9 – 10 minutes (depending on which study you read). The proliferation of Twitter, blogs, Facebook and texting contributes to this informational tsunami. They also create a greater challenge analyzing the volume of information as messages become shorter and cryptic (Twitter reports over 2 billion tweets a month) at the same time ensuring they are factually correct. We now get billions of messages just to tell us someone, somewhere created a message earmarked for us to read. Last month, AT&T sent 1 billion such messages over its network up from 400 million a month 11 months ago.
As I look at the impact this phenomenon has on our decision-making process as leaders, I see less contingency planning due to the instantaneous nature of technology and less reflection on the meaning of information to create sustainable knowledge. I recently observed a customer in a local Subway sandwich shop dictating multiple orders to the person making the sandwiches. After each order he went back to his phone for the next order. I wondered to myself if that person were in a business environment and had to remember multiple facts, would that be his way of managing information?
Seneca wrote “Elite, literate Romans were discovering the great paradox of information: the more of it that is available, the harder it is to be truly knowledgeable. It was impossible to process it all in a thoughtful way.” As leaders striving to make effective knowledgeable decisions about your business, how many tomatoes are in your fruit salad?
Lead Well!
Monday, November 8, 2010
Workers Distracted by Email and Phone Calls suffer a fall in IQ…
…More than Twice that found in Marijuana Smokers!
These are the conclusions of a 2005 study funded by Hewlett Packard and conducted by the University of London Institute of Psychiatry. It also sets the stage for this month’s topic on multitasking. Many leaders today pride themselves in being able to multitask, in some cases the more multi- the better. They also expect their teams to be able to multitask falsely believing it to be a sign of efficiency. In fact, it is quite the opposite of the truth. (click here to continue reading)
While it is true the brain can simultaneously manage multiple tasks like controlling your heartbeat while you listen to music, leaders are most focused on is the ability to pay attention to multiple tasks and do them well. In this scenario the brain is working in a sequential fashion. No matter it appears someone is doing multiple activities at one time, the brain is really task-switching one after the other very fast. In truth, the more we ask the brain to do at any given time the less our ability to pay attention any of those activities. The most visible examples of this phenomenon are driving and performing other activities at the same time (talking on the phone, texting, applying make-up etc.) drawing attention to the serious safety issues.
But what of workplace productivity? Is it such a big deal that we try to do many things simultaneously? In a practical sense, when we interrupt what we are currently focused on to take a call on our smart-phone or respond to an email on our computer, the brain has to shift gears to provide new focus on a new topic. This means quickly shifting our subconscious rule sets for to determine how we handle this new task. When we are finished answering/responding to the interruption, we shift again and once more re-establish focus on the original activity (how often do we say “Where was I?”) Unless you have well-established working memory, this can result in a complete restart of the original task. A University of California study found it took office workers 25 minutes on average to return to their original tasks after being interrupted by phone calls and emails. How many times are you interrupted in a day? Do you set aside blocks of time during your most productive time of the day to work on your high priority work? What happens to productivity when you lose nearly a half hour every time you are interrupted? In 2007 it was estimated extreme multitasking and information overload annually costs the U.S. economy $650 Billion in lost productivity.
Another important question for leaders is how many times a day are they the interruption? Leaders espouse the benefits of productivity and efficiency, but are they aware of how many times they are interrupting their teams and staffs for low priority reasons? Are they creating a climate of poor productivity due to their own challenges with time management and productivity? In my experience, the best way to answer these questions is to take two weeks and track what you and your staff are doing with their time. If you notice they are doing something different every 15 minutes it is a sure sign they are trying to multitask and may be struggling to focus on more important things. How are the most productive staff members managing their time? In every opportunity I had to conduct these time-use studies with my teams we created improvement programs that more than paid for themselves in increased productivity!
The idea behind this topic is not that we don’t have the ability to do multiple things at one time (Millennials will debate they can do this all day long!). It is whether we can produce desired results by doing multiple things at one time. To achieve your desired results, are you relying on employees who are less productive than marijuana smokers?
Lead Well!
These are the conclusions of a 2005 study funded by Hewlett Packard and conducted by the University of London Institute of Psychiatry. It also sets the stage for this month’s topic on multitasking. Many leaders today pride themselves in being able to multitask, in some cases the more multi- the better. They also expect their teams to be able to multitask falsely believing it to be a sign of efficiency. In fact, it is quite the opposite of the truth. (click here to continue reading)
While it is true the brain can simultaneously manage multiple tasks like controlling your heartbeat while you listen to music, leaders are most focused on is the ability to pay attention to multiple tasks and do them well. In this scenario the brain is working in a sequential fashion. No matter it appears someone is doing multiple activities at one time, the brain is really task-switching one after the other very fast. In truth, the more we ask the brain to do at any given time the less our ability to pay attention any of those activities. The most visible examples of this phenomenon are driving and performing other activities at the same time (talking on the phone, texting, applying make-up etc.) drawing attention to the serious safety issues.
But what of workplace productivity? Is it such a big deal that we try to do many things simultaneously? In a practical sense, when we interrupt what we are currently focused on to take a call on our smart-phone or respond to an email on our computer, the brain has to shift gears to provide new focus on a new topic. This means quickly shifting our subconscious rule sets for to determine how we handle this new task. When we are finished answering/responding to the interruption, we shift again and once more re-establish focus on the original activity (how often do we say “Where was I?”) Unless you have well-established working memory, this can result in a complete restart of the original task. A University of California study found it took office workers 25 minutes on average to return to their original tasks after being interrupted by phone calls and emails. How many times are you interrupted in a day? Do you set aside blocks of time during your most productive time of the day to work on your high priority work? What happens to productivity when you lose nearly a half hour every time you are interrupted? In 2007 it was estimated extreme multitasking and information overload annually costs the U.S. economy $650 Billion in lost productivity.
Another important question for leaders is how many times a day are they the interruption? Leaders espouse the benefits of productivity and efficiency, but are they aware of how many times they are interrupting their teams and staffs for low priority reasons? Are they creating a climate of poor productivity due to their own challenges with time management and productivity? In my experience, the best way to answer these questions is to take two weeks and track what you and your staff are doing with their time. If you notice they are doing something different every 15 minutes it is a sure sign they are trying to multitask and may be struggling to focus on more important things. How are the most productive staff members managing their time? In every opportunity I had to conduct these time-use studies with my teams we created improvement programs that more than paid for themselves in increased productivity!
The idea behind this topic is not that we don’t have the ability to do multiple things at one time (Millennials will debate they can do this all day long!). It is whether we can produce desired results by doing multiple things at one time. To achieve your desired results, are you relying on employees who are less productive than marijuana smokers?
Lead Well!
Thursday, September 2, 2010
Leadership Lessons…
…From Running Triathlons.
Several weeks ago I ran a Sprint Triathlon in our hometown, something I’ve done for the last four years. However, what made this year special is I ran it with my youngest son who was running the race for the first time. Since it was his first race and our plan was to run it together, our motto for the race became “Start Steady, Finish Strong”. Undoubtedly, most of you reading this have heard of the famous Ironman Triathlon in Hawaii. The Sprint Triathlon is the shortest of the four official distances but still involves the same three events – swimming, biking and running in that order. So as I reflected on the race, it occurred to me the parallels between training and running triathlons with the leadership coaching I do as part of my practice.
When I first began competing in triathlons, I viewed them as separate events in which to train. I was a competitive swimmer and runner in both high school and college so it was natural for me to train in each event as I had before. This is no different when we find ourselves approaching new professional and personal challenges by relying on the skills and knowledge we developed from our past. Even when we set goals for ourselves to improve in an individual endeavor, it is still the past that governs our execution unless we consciously make a change. And as I realized my training regimen wasn’t enough, I needed to make a change - in my attitude regarding the race itself!
I had to change my mental approach to the race to ultimately achieve my goal. I actually made two changes. First, I changed my mental approach to the race from three individual events back-to-back-to-back to one race with five aligned competitive pieces. I say five because the transitions between events are really mini-events in and by themselves as the clock continues to tick during the swim-bike and bike-run transitions. Secondly, I realized I could not do this solely based on my own experience. I reached out to accomplished tri-athletes and read blogs from others who were also trying to optimize their triathlon experience. These two changes helped me align my actions to accomplish my overall goal.
So what does this have to do with leadership? How much are we relying on the experiences of the past to deal with today’s challenges? Are we going about change alone or are we reaching out to others to help us develop new leadership attitudes? Is our business a series of disparate, misaligned goals preventing us from achieving our ultimate objective? These are questions all leaders should regularly ask themselves.
I recently read a quote from Fred Lebow, founder of the New York City Marathon, a race I’ve run twice who said, “In running, it doesn’t matter whether you come in first, in the middle of the pack or last. You can say ‘I have finished’. There is a lot of satisfaction in that”. As my son and I completed the triathlon, I had no idea where in the pack we finished but I do know we Started Steady and we definitely Finished Strong! Are your goals aligned for a strong finish?
Lead Well!
Rick Lochner
Several weeks ago I ran a Sprint Triathlon in our hometown, something I’ve done for the last four years. However, what made this year special is I ran it with my youngest son who was running the race for the first time. Since it was his first race and our plan was to run it together, our motto for the race became “Start Steady, Finish Strong”. Undoubtedly, most of you reading this have heard of the famous Ironman Triathlon in Hawaii. The Sprint Triathlon is the shortest of the four official distances but still involves the same three events – swimming, biking and running in that order. So as I reflected on the race, it occurred to me the parallels between training and running triathlons with the leadership coaching I do as part of my practice.
When I first began competing in triathlons, I viewed them as separate events in which to train. I was a competitive swimmer and runner in both high school and college so it was natural for me to train in each event as I had before. This is no different when we find ourselves approaching new professional and personal challenges by relying on the skills and knowledge we developed from our past. Even when we set goals for ourselves to improve in an individual endeavor, it is still the past that governs our execution unless we consciously make a change. And as I realized my training regimen wasn’t enough, I needed to make a change - in my attitude regarding the race itself!
I had to change my mental approach to the race to ultimately achieve my goal. I actually made two changes. First, I changed my mental approach to the race from three individual events back-to-back-to-back to one race with five aligned competitive pieces. I say five because the transitions between events are really mini-events in and by themselves as the clock continues to tick during the swim-bike and bike-run transitions. Secondly, I realized I could not do this solely based on my own experience. I reached out to accomplished tri-athletes and read blogs from others who were also trying to optimize their triathlon experience. These two changes helped me align my actions to accomplish my overall goal.
So what does this have to do with leadership? How much are we relying on the experiences of the past to deal with today’s challenges? Are we going about change alone or are we reaching out to others to help us develop new leadership attitudes? Is our business a series of disparate, misaligned goals preventing us from achieving our ultimate objective? These are questions all leaders should regularly ask themselves.
I recently read a quote from Fred Lebow, founder of the New York City Marathon, a race I’ve run twice who said, “In running, it doesn’t matter whether you come in first, in the middle of the pack or last. You can say ‘I have finished’. There is a lot of satisfaction in that”. As my son and I completed the triathlon, I had no idea where in the pack we finished but I do know we Started Steady and we definitely Finished Strong! Are your goals aligned for a strong finish?
Lead Well!
Rick Lochner
Tuesday, August 3, 2010
We Need 100%...
...From 100%
As a leader in corporate organizations, the military and small businesses, this was a frequent reminder to my organization we all have a role to play in our organization’s success. It also reminded them of the importance of showing up every day with everything they have to give, not just show up. Said differently, I was promoting full employee engagement by everyone in the organization. As we reviewed the four key elements of the Total Leadership Model these previous four months, it all centers on the level of engagement by employees, associates and volunteers who create the moments of truth and points of connection between the organization and those who bring you business.
Last month I referenced the results of a recent Gallup Poll survey indicating in average performing organizations, only 33% of employees are engaged in the business. This compared to world-class organizations where the exact opposite is true and 67% of the organization engaged in the business. In addition, in average performing organizations, 18% of employees were actively disengaged. This means that only a third of the organization cares about the activities contributing directly to employee retention, productivity, customer satisfaction/engagement, safety and profitability; all measurable dimensions of organizational success. Improving employee engagement has a direct effect on customer loyalty. Last month I mentioned even a 5% increase in customer loyalty can improve profits by 25% up to 85% depending on industry.
But what if you are a small or medium sized business with few employees? Does this matter? How engaged are the employees of your larger customers, especially the ones who implement your services, purchase your products and pay your invoices? If they don’t care beyond the minimum, how does that affect your business? Employee engagement impacts every business, large or small!
And it all starts with leadership. Jack Welch, former CEO of General Electric once said, “Any company trying to compete…must figure out how to engage the mind of every employee.” We define organizational culture as the shared values, beliefs and actions that develop within an organization guiding the behavior of its members. Employee attitude is where it starts for leaders because it is attitude that drives behavior and it is behavior that drives the ability to achieve the desired results of the organization. The behavior observed by your customers, suppliers and other employees forms the ongoing perception of your organization and your business. As you understand the market’s perception of your business, are you getting 100% out of 100%?
Lead Well!
As a leader in corporate organizations, the military and small businesses, this was a frequent reminder to my organization we all have a role to play in our organization’s success. It also reminded them of the importance of showing up every day with everything they have to give, not just show up. Said differently, I was promoting full employee engagement by everyone in the organization. As we reviewed the four key elements of the Total Leadership Model these previous four months, it all centers on the level of engagement by employees, associates and volunteers who create the moments of truth and points of connection between the organization and those who bring you business.
Last month I referenced the results of a recent Gallup Poll survey indicating in average performing organizations, only 33% of employees are engaged in the business. This compared to world-class organizations where the exact opposite is true and 67% of the organization engaged in the business. In addition, in average performing organizations, 18% of employees were actively disengaged. This means that only a third of the organization cares about the activities contributing directly to employee retention, productivity, customer satisfaction/engagement, safety and profitability; all measurable dimensions of organizational success. Improving employee engagement has a direct effect on customer loyalty. Last month I mentioned even a 5% increase in customer loyalty can improve profits by 25% up to 85% depending on industry.
But what if you are a small or medium sized business with few employees? Does this matter? How engaged are the employees of your larger customers, especially the ones who implement your services, purchase your products and pay your invoices? If they don’t care beyond the minimum, how does that affect your business? Employee engagement impacts every business, large or small!
And it all starts with leadership. Jack Welch, former CEO of General Electric once said, “Any company trying to compete…must figure out how to engage the mind of every employee.” We define organizational culture as the shared values, beliefs and actions that develop within an organization guiding the behavior of its members. Employee attitude is where it starts for leaders because it is attitude that drives behavior and it is behavior that drives the ability to achieve the desired results of the organization. The behavior observed by your customers, suppliers and other employees forms the ongoing perception of your organization and your business. As you understand the market’s perception of your business, are you getting 100% out of 100%?
Lead Well!
Tuesday, July 6, 2010
Customer Satisfaction is Worthless...
…Customer Loyalty is Priceless.
This often quoted title from Jeffrey Gitomer’s book sets the stage for the fourth and final component of the Total Leadership Model. In a previous edition (11/09) of this newsletter, I introduced some general differences between satisfied customers and loyal customers. However, the real question becomes “How is Customer Loyalty a competitive advantage?”
Customers generate revenue, loyal customers generate profit. When I was leading corporate organizations, our customer and sales support teams worked closely alongside our sales teams. It was a relationship not always obvious or easy to manage, but one I always insisted on nonetheless. You see, while I was interested in the initial sale to a new client, I was even more interested in the second, third, fourth, nth sales. Why? Because I knew how important the follow-on sales were to profitability and creating emotional relationships with our customers. In industries where the core products and services are commodities, it was the power of points of connection, or “Moments of Truth” that drove ongoing loyalty within our customer base. Studies show as little as a 5% increase in customer loyalty can drive an increase in profits from 25% to over 80%. To highlight the power of moments of truth, another study showed that if an organization’s employees were 100% engaged, they would see a 70% increase in customer loyalty. Why is this significant? A recent Gallup Poll showed an average employee engagement level of 30%. Said differently, 70% of employees are disengaged creating an untenable gap in the ability to create powerful points of connection with their customer base and causing a direct drain on profits!
But who or what are we loyal to? We know when we engage in the Buying/Selling process, buyers look to buy you first before they look at your company or your products. They are looking to establish the first of the three components necessary to developing customer loyalty – trust. Whether it is you, the entrepreneur, you the corporate leader or you the member of a non-profit team, prospective customers and donors are first and foremost looking to see if they trust you! What is their first impression of you, your brand, your office or your website? What are others saying about you? These moments of truth become the catalyst to creating a consistent experience creating the second component of loyalty – a strong emotional tie with the customer. The third component of customer loyalty is the use of empathy to continuously and consistently meet or exceed an ever-increasing level of expectation in today’s business environment and strengthen the overall customer relationship.
It is the customer’s experience with you that counts. Peter Drucker once said “Quality in a Service or Product is not what you put into it. It is what the Client or Customer gets out of it.” Is what your customers are getting out of your products or services worthless or priceless?
Lead Well!
This often quoted title from Jeffrey Gitomer’s book sets the stage for the fourth and final component of the Total Leadership Model. In a previous edition (11/09) of this newsletter, I introduced some general differences between satisfied customers and loyal customers. However, the real question becomes “How is Customer Loyalty a competitive advantage?”
Customers generate revenue, loyal customers generate profit. When I was leading corporate organizations, our customer and sales support teams worked closely alongside our sales teams. It was a relationship not always obvious or easy to manage, but one I always insisted on nonetheless. You see, while I was interested in the initial sale to a new client, I was even more interested in the second, third, fourth, nth sales. Why? Because I knew how important the follow-on sales were to profitability and creating emotional relationships with our customers. In industries where the core products and services are commodities, it was the power of points of connection, or “Moments of Truth” that drove ongoing loyalty within our customer base. Studies show as little as a 5% increase in customer loyalty can drive an increase in profits from 25% to over 80%. To highlight the power of moments of truth, another study showed that if an organization’s employees were 100% engaged, they would see a 70% increase in customer loyalty. Why is this significant? A recent Gallup Poll showed an average employee engagement level of 30%. Said differently, 70% of employees are disengaged creating an untenable gap in the ability to create powerful points of connection with their customer base and causing a direct drain on profits!
But who or what are we loyal to? We know when we engage in the Buying/Selling process, buyers look to buy you first before they look at your company or your products. They are looking to establish the first of the three components necessary to developing customer loyalty – trust. Whether it is you, the entrepreneur, you the corporate leader or you the member of a non-profit team, prospective customers and donors are first and foremost looking to see if they trust you! What is their first impression of you, your brand, your office or your website? What are others saying about you? These moments of truth become the catalyst to creating a consistent experience creating the second component of loyalty – a strong emotional tie with the customer. The third component of customer loyalty is the use of empathy to continuously and consistently meet or exceed an ever-increasing level of expectation in today’s business environment and strengthen the overall customer relationship.
It is the customer’s experience with you that counts. Peter Drucker once said “Quality in a Service or Product is not what you put into it. It is what the Client or Customer gets out of it.” Is what your customers are getting out of your products or services worthless or priceless?
Lead Well!
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