…You Don’t Know What You Are Doing.
These words from W. Edwards Deming, considered the godfather of organizational process improvement, are a great way to introduce the third element of the Total Leadership Model. To put it in perspective, we previously introduced Strategy as the foundation of the model and last month discussed Leadership Development as one of the two key supporting elements of the model. This month we look at Operational Improvement, the Process side of Total Leadership, as the other supporting element crucial to being an effective leader in today’s business environment.
Everything we do in our organization be it public, private, non-profit, large or small is a process. Everything we do has inherent interdependencies with what happens before during and after each task and function we execute. And because each task and function we execute has an outcome, it becomes a point in which we can measure the desired results of that task or function. In Dr. H. James Harrington’s book, Business Process Improvement he puts it this way:
• “Measurements are key.
• If you cannot measure it, you cannot control it.
• If you cannot control it, you cannot manage it.
• If you cannot manage it, you cannot improve it.
• It is as simple as that.”
At this point, there may be those of you who may be thinking this is great, but I don’t operate in the plant or in operations where our products are made. In truth more than half of the Operational Improvement opportunities are in the traditional “front office” functions such as Sales, Marketing, Finance and Human Resources. Or there may be those entrepreneurs who run small businesses who think this is great for larger companies, but does not apply to small businesses. In fact, missing these opportunities for Operational Improvement likely has a much greater financial impact as a percentage of revenue than in the larger companies. It’s akin to thinking gravity does not apply to you because you weigh less than twenty pounds. All processes have very real financial impacts if not producing their desired results!
Today’s leaders see this as an opportunity to truly understand what they do in the context of a global business environment constantly evolving through regulatory, economic and socio-cultural changes. As a leader it’s not enough to merely invest in people in the organization if you are not also willing to ensure the processes they use are optimized for success. So, describe what you do again?
Lead Well!
Tuesday, June 1, 2010
Friday, May 7, 2010
Lead, Follow…
…or Get Out Of The Way.
This well-known quote from Thomas Paine serves as the basis for the second segment of the Total Leadership Process. Thomas Paine has been called the Voice of the Common Man and as such serves as a backdrop for the People aspect of Total Leadership. Last month, we established Purpose as the foundation of Total Leadership revealing itself through the organization’s Vision and Strategy. This month we invoke the People aspect of Total Leadership as we look at organizational development processes organizations use to determine who can communicate the strategic objectives, execute those strategic objectives and provide feedback on progress made on the strategic objectives. In other words, how are organizations developing leaders at all levels of the organization? (click here to continue reading)
In today’s competitive and turbulent, fast-moving economy developing the right leaders becomes an imperative for survival of the business, whether for-profit or not-for-profit. In much the same context as my comments last month where previous strategic assumptions are likely not to work in our current economy, so too are the attitudes and methods traditionally used to develop leaders called into question. We can no longer assume leadership is about possessing certain personal characteristics but rather about the ability to set goals and achieve desired results.
So what does this mean exactly? It means we have to get beyond the development process that assumes if you grow certain leadership qualities in people then somehow this will positively impact operational results. Too much time, money and energy is wasted creating a yardstick of designated leadership characteristics only to find they are yesterday’s news based on the fact changing external and internal forces for change all organizations face. It becomes a journey of hope that is no more effective in today’s market than the “Field of Dreams” (build it and they will come) business strategy.
The solution is all about defining and justifying leadership development on the tangible outcomes it is intended to produce. It drives a strategy focused on the desired results and then grows and develops the people (and processes) to realize those results. As Peter Drucker so aptly stated, “Leadership is all about the Results”.
The challenge with this solution is it assumes the People development process throughout any organization is aligned to its Purpose. This is true regardless of the size of the business or non-profit organization. Is the Leadership Development process in your organization linked tight enough to the Vision and Strategy so when the Strategy changes to adjust to the post-recession economy your organization automatically adjusts the leadership development to develop new skills to deliver new results? If not, are these leaders really leading or are they just in the way?
Lead Well!
This well-known quote from Thomas Paine serves as the basis for the second segment of the Total Leadership Process. Thomas Paine has been called the Voice of the Common Man and as such serves as a backdrop for the People aspect of Total Leadership. Last month, we established Purpose as the foundation of Total Leadership revealing itself through the organization’s Vision and Strategy. This month we invoke the People aspect of Total Leadership as we look at organizational development processes organizations use to determine who can communicate the strategic objectives, execute those strategic objectives and provide feedback on progress made on the strategic objectives. In other words, how are organizations developing leaders at all levels of the organization? (click here to continue reading)
In today’s competitive and turbulent, fast-moving economy developing the right leaders becomes an imperative for survival of the business, whether for-profit or not-for-profit. In much the same context as my comments last month where previous strategic assumptions are likely not to work in our current economy, so too are the attitudes and methods traditionally used to develop leaders called into question. We can no longer assume leadership is about possessing certain personal characteristics but rather about the ability to set goals and achieve desired results.
So what does this mean exactly? It means we have to get beyond the development process that assumes if you grow certain leadership qualities in people then somehow this will positively impact operational results. Too much time, money and energy is wasted creating a yardstick of designated leadership characteristics only to find they are yesterday’s news based on the fact changing external and internal forces for change all organizations face. It becomes a journey of hope that is no more effective in today’s market than the “Field of Dreams” (build it and they will come) business strategy.
The solution is all about defining and justifying leadership development on the tangible outcomes it is intended to produce. It drives a strategy focused on the desired results and then grows and develops the people (and processes) to realize those results. As Peter Drucker so aptly stated, “Leadership is all about the Results”.
The challenge with this solution is it assumes the People development process throughout any organization is aligned to its Purpose. This is true regardless of the size of the business or non-profit organization. Is the Leadership Development process in your organization linked tight enough to the Vision and Strategy so when the Strategy changes to adjust to the post-recession economy your organization automatically adjusts the leadership development to develop new skills to deliver new results? If not, are these leaders really leading or are they just in the way?
Lead Well!
Sunday, March 28, 2010
You Cannot Control The Wind…
…But You Can Adjust The Sails.
These words to the Ricky Skaggs song Can’t Control The Wind are a great entrée into the first of four monthly segments on the Total Leadership Process. These particular words came to mind as I was reading a recent Fortune article about Larry Ellison and the BMW Oracle Racing Team returning the America’s Cup Trophy back to the United States after a fifteen-year absence. His thoughts on the victory centered on the right combination of technology, sailing skills and strategy.
Strategy is the focus of this segment as it forms the foundation of the Total Leadership Process and reflects the Purpose of the organization. In actuality, the organizational Purpose is a combination of Vision, Values, Mission and Strategy but it is the Strategy that determines how the organization will compete in its current market and industry. Understanding the importance of this definition is crucial as the competitive landscape and assumptions in every industry are changing.
What strategic assumptions worked when economic and industry growth rates were 10% - 15% before the recession will be different in the 2% - 3% growth economy of the next several years. Likewise, targeting double-digit growth rates will require different strategic assumptions than in previous years where that level of growth was not the norm. A strategy setting a path to 12% growth year-over-year sounds good at face value. However, if the industry is growing 15%, the strategy loses market share.
Like the wind challenges sailors, we may have difficulty totally understanding and reacting to the competitive landscape. Some events we can see well in advance. The recent healthcare reform legislation was announced well in advance, enabling organizations to think through various contingency plans on how to react to the final version. In effect for less than a week, several large companies already announced changes as a direct result of the new law.
Other competitive events are not well known, yet must be anticipated in order to put forth a reasonable strategy for success. Most of us cannot accurately predict the future. But the issue is not to predict the future; it is to prepare for the future. Successful leaders continuously run scenarios for their market or industry helping them adapt quickly to their changing competitive landscape.
With so many changes happening at an ever-increasing rate, do you have a means to capture what your market is telling your organization every day in a way that is meaningful to the contingency scenarios relevant to your strategy? Ask yourself how much time your organization spends managing the past versus navigating towards the future. If we drove our cars the same way how much progress would we make?
When the wind changes direction, which way will your crew be facing?
Lead Well!
These words to the Ricky Skaggs song Can’t Control The Wind are a great entrée into the first of four monthly segments on the Total Leadership Process. These particular words came to mind as I was reading a recent Fortune article about Larry Ellison and the BMW Oracle Racing Team returning the America’s Cup Trophy back to the United States after a fifteen-year absence. His thoughts on the victory centered on the right combination of technology, sailing skills and strategy.
Strategy is the focus of this segment as it forms the foundation of the Total Leadership Process and reflects the Purpose of the organization. In actuality, the organizational Purpose is a combination of Vision, Values, Mission and Strategy but it is the Strategy that determines how the organization will compete in its current market and industry. Understanding the importance of this definition is crucial as the competitive landscape and assumptions in every industry are changing.
What strategic assumptions worked when economic and industry growth rates were 10% - 15% before the recession will be different in the 2% - 3% growth economy of the next several years. Likewise, targeting double-digit growth rates will require different strategic assumptions than in previous years where that level of growth was not the norm. A strategy setting a path to 12% growth year-over-year sounds good at face value. However, if the industry is growing 15%, the strategy loses market share.
Like the wind challenges sailors, we may have difficulty totally understanding and reacting to the competitive landscape. Some events we can see well in advance. The recent healthcare reform legislation was announced well in advance, enabling organizations to think through various contingency plans on how to react to the final version. In effect for less than a week, several large companies already announced changes as a direct result of the new law.
Other competitive events are not well known, yet must be anticipated in order to put forth a reasonable strategy for success. Most of us cannot accurately predict the future. But the issue is not to predict the future; it is to prepare for the future. Successful leaders continuously run scenarios for their market or industry helping them adapt quickly to their changing competitive landscape.
With so many changes happening at an ever-increasing rate, do you have a means to capture what your market is telling your organization every day in a way that is meaningful to the contingency scenarios relevant to your strategy? Ask yourself how much time your organization spends managing the past versus navigating towards the future. If we drove our cars the same way how much progress would we make?
When the wind changes direction, which way will your crew be facing?
Lead Well!
Wednesday, March 3, 2010
We Can Learn a Lot about Purpose Driven Leadership…
From the Super Bowl Champion New Orleans Saints.
Now this may seem like a strange way for me to discuss leadership as those who know me know I am a lifelong Colts fan. However, I did spend half my military career in Louisiana and Mississippi only hours from New Orleans and the French Quarter. It is during these times we came to appreciate the food, music and culture of the city. I do know what it feels like to have to evacuate in front of an oncoming hurricane and if nothing else, Sean Payton, the Saints coach is from our hometown of Naperville, IL. So it is with some attachment I use their recent Super Bowl victory as a backdrop for Purpose Driven Leadership.
Purpose Driven Leadership supposes, in spite of all the talk of the recession, jobs, expenses and profits, people want more. This translates through the organization’s Vision and Values. Organizations (public, private and non-profit alike) who have a clear Vision of what they want to become have a distinct and clear advantage over their competitors over the long haul, especially when dealing with change. These same organizations have and live a set of Values embraced by all in the organization and reinforced daily by their leadership. The Saints had a purpose that transcended what happened on the football field earlier this month. They played to not only win the Super Bowl but to provide a sense of higher belief in a home city still rebuilding both physically and culturally. What makes the ideal even more important in my mind is by staying true to their purpose, leaders must take risks to achieve the desired results. The Saints certainly made that point clear with several risky plays including the now famous on-side kick to begin the second half of the game.
Earlier this week I had the opportunity to hear from another member of a Super Bowl team, Jim Covert from the 1985 Chicago Bears. In his speech on leadership he highlighted the idea of Values. As the President and CEO of The Institute for Transfusion Medicine he sees his purpose as creating fundamental and sustainable change through leadership. In doing so, he identified three Values he uses to achieve his Purpose:
➢ Honesty and Integrity – Lead By Example
➢ Set Expectations – Use Effective Goal Setting
➢ Accountability – For You and Those Around You
A story he relayed was of Mike Ditka, the Bears coach at the time, setting a goal to win the Super Bowl at the beginning of the 1983 training camp. What stood out is he also said half of the assembled players would likely not be there, which turned out to be true two years later when they did win the Super Bowl.
So what is the Purpose of your team and is everyone on board to help you win your Super Bowl?
Lead Well.
Now this may seem like a strange way for me to discuss leadership as those who know me know I am a lifelong Colts fan. However, I did spend half my military career in Louisiana and Mississippi only hours from New Orleans and the French Quarter. It is during these times we came to appreciate the food, music and culture of the city. I do know what it feels like to have to evacuate in front of an oncoming hurricane and if nothing else, Sean Payton, the Saints coach is from our hometown of Naperville, IL. So it is with some attachment I use their recent Super Bowl victory as a backdrop for Purpose Driven Leadership.
Purpose Driven Leadership supposes, in spite of all the talk of the recession, jobs, expenses and profits, people want more. This translates through the organization’s Vision and Values. Organizations (public, private and non-profit alike) who have a clear Vision of what they want to become have a distinct and clear advantage over their competitors over the long haul, especially when dealing with change. These same organizations have and live a set of Values embraced by all in the organization and reinforced daily by their leadership. The Saints had a purpose that transcended what happened on the football field earlier this month. They played to not only win the Super Bowl but to provide a sense of higher belief in a home city still rebuilding both physically and culturally. What makes the ideal even more important in my mind is by staying true to their purpose, leaders must take risks to achieve the desired results. The Saints certainly made that point clear with several risky plays including the now famous on-side kick to begin the second half of the game.
Earlier this week I had the opportunity to hear from another member of a Super Bowl team, Jim Covert from the 1985 Chicago Bears. In his speech on leadership he highlighted the idea of Values. As the President and CEO of The Institute for Transfusion Medicine he sees his purpose as creating fundamental and sustainable change through leadership. In doing so, he identified three Values he uses to achieve his Purpose:
➢ Honesty and Integrity – Lead By Example
➢ Set Expectations – Use Effective Goal Setting
➢ Accountability – For You and Those Around You
A story he relayed was of Mike Ditka, the Bears coach at the time, setting a goal to win the Super Bowl at the beginning of the 1983 training camp. What stood out is he also said half of the assembled players would likely not be there, which turned out to be true two years later when they did win the Super Bowl.
So what is the Purpose of your team and is everyone on board to help you win your Super Bowl?
Lead Well.
Wednesday, February 3, 2010
We Will Do That For You…
…Followed by a Firm Handshake.
One of my favorite gifts this past Christmas was a sculpture of a handshake, a gift from my sons. They know the handshake holds high value to me as a symbol of the right kind of leader to be. It is not an accident it is part of the RPC Leadership Associates brand. While difficult to trace the exact origin of the handshake, we can easily trace its origins back as far as medieval times when knights and royalty would shake as a gesture to let the other know there were no weapons present. In other words, it was a sign of trust. It is trust, which we as a culture continue to struggle with today.
We seldom go a day without seeing a headline or a story related to trust, typically a displayed lack of it. Whether in business, politics or sports names like Madoff, Blagojevich and Woods conjure up images of a broken trust between them and the relationships with the people who helped them succeed in the first place. So I believe it is here we should begin our discussion of trust by looking at what it means to have a meaningful relationship as a leader.
If we look at the buying process used by many in business for making a value based decision, we find it begins with the first thing people buy – you! It is through the strength of the relationship that starts the trust building process. Building trust is much like saving money in a piggy bank. Every moment of truth, every interaction with another person and every transaction in a relationship helps build the trust bank account. I heard it described recently as “we add trust to a relationship a nickel at a time, but we lose trust in that same relationship a dollar at a time”. If leaders are looking for trust in the relationships with their teams the first place they need to look is in the mirror. Are you the type of leader who is trustworthy? I spoke last month of the importance of self-awareness as the authentic leader’s greatest tool. This is crucial as it helps a leader’s ability to leverage candor and empathy as crucial elements to building trust. If people in an organization trust their leader as a person, they stand a much better chance of trusting their organization as a whole. A recent Gallup poll suggests only 30% of employees are fully engaged in their organization. What organization in this day and age can afford to have 30% engagement? Yet by disregarding the very elements that build trust within the culture of their organization, they may as well hang a sign outside their door stating “Employee Engagement Doesn’t Matter Here”.
Finally, a fitting quote from David Armistead I often use, “Trust each other again and again. When the trust level gets high enough, people transcend apparent limits, discovering new and awesome abilities for which they were previously unaware”. Are the trust levels in your organization high enough? Are you ready to discover new abilities to which you are now unaware? We will help you get there. Can we shake on that?
Lead Well.
Rick Lochner
One of my favorite gifts this past Christmas was a sculpture of a handshake, a gift from my sons. They know the handshake holds high value to me as a symbol of the right kind of leader to be. It is not an accident it is part of the RPC Leadership Associates brand. While difficult to trace the exact origin of the handshake, we can easily trace its origins back as far as medieval times when knights and royalty would shake as a gesture to let the other know there were no weapons present. In other words, it was a sign of trust. It is trust, which we as a culture continue to struggle with today.
We seldom go a day without seeing a headline or a story related to trust, typically a displayed lack of it. Whether in business, politics or sports names like Madoff, Blagojevich and Woods conjure up images of a broken trust between them and the relationships with the people who helped them succeed in the first place. So I believe it is here we should begin our discussion of trust by looking at what it means to have a meaningful relationship as a leader.
If we look at the buying process used by many in business for making a value based decision, we find it begins with the first thing people buy – you! It is through the strength of the relationship that starts the trust building process. Building trust is much like saving money in a piggy bank. Every moment of truth, every interaction with another person and every transaction in a relationship helps build the trust bank account. I heard it described recently as “we add trust to a relationship a nickel at a time, but we lose trust in that same relationship a dollar at a time”. If leaders are looking for trust in the relationships with their teams the first place they need to look is in the mirror. Are you the type of leader who is trustworthy? I spoke last month of the importance of self-awareness as the authentic leader’s greatest tool. This is crucial as it helps a leader’s ability to leverage candor and empathy as crucial elements to building trust. If people in an organization trust their leader as a person, they stand a much better chance of trusting their organization as a whole. A recent Gallup poll suggests only 30% of employees are fully engaged in their organization. What organization in this day and age can afford to have 30% engagement? Yet by disregarding the very elements that build trust within the culture of their organization, they may as well hang a sign outside their door stating “Employee Engagement Doesn’t Matter Here”.
Finally, a fitting quote from David Armistead I often use, “Trust each other again and again. When the trust level gets high enough, people transcend apparent limits, discovering new and awesome abilities for which they were previously unaware”. Are the trust levels in your organization high enough? Are you ready to discover new abilities to which you are now unaware? We will help you get there. Can we shake on that?
Lead Well.
Rick Lochner
Friday, December 18, 2009
To Be or Not To Be…
…Aye There’s The Point.
These famous and very recognizable words are from William Shakespeare’s Hamlet, Act III, Scene I. I chose them to introduce this month’s topic and did so in what many consider the original, or in our case, authentic form. Authenticity in a crucial element in what I call Real Leadership defined as setting goals and achieving desired results. I also like the way Bill George, former CEO at Medtronic, stated in a Fall 2006 article for U.S. News & World Report titled Truly Authentic Leadership when he stated “The only valid test of a leader is his or her ability to bring people together to achieve sustainable results over time. There is no such thing as the “One-Minute Leader” because real leadership requires years of development and hard work.”
So what makes a person an authentic leader? We all know everyone has the ability to lead and we know we all carry some value set we’ve learned from early childhood. It is the influence from both areas that create the dimensions of authentic leadership listed below:
➢ I recently had the privilege of meeting Tim Sanders, author of Love is the Killer App. During his presentation he reinforced the notion of knowing and following our Purpose with passion. Without Purpose we tend to lose our way as leaders, especially in the face of change and uncertainty. Authentic leaders lead with Purpose.
➢ Authentic leaders live their Values. Many have heard me say “What we believe-we think. What we think-we do”. When we have congruence between our Values (what we believe), our Attitudes (what we think) and our Behaviors (what we do) we lead with authenticity.
➢ One of the individual assessments used in our coaching practice helps clients understand the relationship between how they think with their head and their heart. Authentic leaders lead with both.
➢ We live in a networked world. In large organizations, the informal network may hold as much sway in the overall success of the organization as the formal organization identified on the organization chart. Individually we use technology to help us create and maintain our ever-growing social networks. Authentic leaders effectively leverage their personal power to create and maintain connected relationships.
➢ Self-awareness is an authentic leader’s greatest tool. It only stands to reason then that self-discipline is a key characteristic of an authentic leader to help them stay the course and on purpose when change and uncertainty look to derail them.
As we approach the holidays, many if not all will take the time to reflect on the past, enjoy the present and plan for the immediate future. In doing so you may ask yourself if you are living your purpose and your values to help others in your networks succeed. After all, authentic leadership of ourselves and/or others is what we should want to be or not to be – isn’t that truly the question?
Lead Well.
Rick Lochner
These famous and very recognizable words are from William Shakespeare’s Hamlet, Act III, Scene I. I chose them to introduce this month’s topic and did so in what many consider the original, or in our case, authentic form. Authenticity in a crucial element in what I call Real Leadership defined as setting goals and achieving desired results. I also like the way Bill George, former CEO at Medtronic, stated in a Fall 2006 article for U.S. News & World Report titled Truly Authentic Leadership when he stated “The only valid test of a leader is his or her ability to bring people together to achieve sustainable results over time. There is no such thing as the “One-Minute Leader” because real leadership requires years of development and hard work.”
So what makes a person an authentic leader? We all know everyone has the ability to lead and we know we all carry some value set we’ve learned from early childhood. It is the influence from both areas that create the dimensions of authentic leadership listed below:
➢ I recently had the privilege of meeting Tim Sanders, author of Love is the Killer App. During his presentation he reinforced the notion of knowing and following our Purpose with passion. Without Purpose we tend to lose our way as leaders, especially in the face of change and uncertainty. Authentic leaders lead with Purpose.
➢ Authentic leaders live their Values. Many have heard me say “What we believe-we think. What we think-we do”. When we have congruence between our Values (what we believe), our Attitudes (what we think) and our Behaviors (what we do) we lead with authenticity.
➢ One of the individual assessments used in our coaching practice helps clients understand the relationship between how they think with their head and their heart. Authentic leaders lead with both.
➢ We live in a networked world. In large organizations, the informal network may hold as much sway in the overall success of the organization as the formal organization identified on the organization chart. Individually we use technology to help us create and maintain our ever-growing social networks. Authentic leaders effectively leverage their personal power to create and maintain connected relationships.
➢ Self-awareness is an authentic leader’s greatest tool. It only stands to reason then that self-discipline is a key characteristic of an authentic leader to help them stay the course and on purpose when change and uncertainty look to derail them.
As we approach the holidays, many if not all will take the time to reflect on the past, enjoy the present and plan for the immediate future. In doing so you may ask yourself if you are living your purpose and your values to help others in your networks succeed. After all, authentic leadership of ourselves and/or others is what we should want to be or not to be – isn’t that truly the question?
Lead Well.
Rick Lochner
Tuesday, December 1, 2009
The best preparation for tomorrow…
…is to do today’s work superbly well.
These words of wisdom from Sir William Osler are timely on two levels. First, many of you are personally and/or professionally preparing for tomorrow – planning your goals for 2010. Secondly, doing today’s work superbly well speaks to, among other things, making every interaction with your customers a Moment of Truth. During this current reset economy, moments of truth are significant to every business owner, corporate leadership team and non-profit organization that recognize the importance of loyal customers and donors.
So what is a loyal customer? Over the years in many customer-facing positions in business services and non-profit organizations, I see these traits as indicative of loyal customers compared to the satisfied customers we traditionally strive for.
• A loyal customer will proactively tell others about your service to others. A satisfied customer will tell others if you ask – maybe.
• A loyal customer will buy from you over and over again because you make it a no-brainer to do so. A satisfied customer will buy again – if it is convenient.
• A loyal customer is loyal because you continuously and routinely exceed their expectations. A satisfied customer has their expectations met - sometimes.
• A loyal customer is looking for, and gets, solutions to their business issues. A satisfied customer buys your products.
I recently came across an example of how inattention to moments of truth can negatively impact customer loyalty. Incidentally, I heard this story from multiple sources at unrelated events amplifying the impact, as I am sure I was not the only one who this story was relayed to. As a result of an acquisition, a computer retailer with local brick and mortar presence continues to advertise their services via the web. The consumer electronics company that purchased them markets the same products in the physical location at different prices and refuses to acknowledge the differences as well as fails to provide long time customers a reasonable and consistent solution, only excuses.
Because loyal customers typically represent less than 20% of your total customer base, on average, the remaining customers represent an opportunity for both you and your competitors. The opportunity is yours when you create and align your moments of truth to create a consistent value-based experience for your customers. However, the advantage goes to your competitors when you fail to provide consistent value and create a void in customer expectations. In the story above, leaders of the parent company created an environment where customers are now thinking about alternatives.
As you prepare for 2010, whom are you giving the advantage to?
Lead Well.
Rick Lochner
These words of wisdom from Sir William Osler are timely on two levels. First, many of you are personally and/or professionally preparing for tomorrow – planning your goals for 2010. Secondly, doing today’s work superbly well speaks to, among other things, making every interaction with your customers a Moment of Truth. During this current reset economy, moments of truth are significant to every business owner, corporate leadership team and non-profit organization that recognize the importance of loyal customers and donors.
So what is a loyal customer? Over the years in many customer-facing positions in business services and non-profit organizations, I see these traits as indicative of loyal customers compared to the satisfied customers we traditionally strive for.
• A loyal customer will proactively tell others about your service to others. A satisfied customer will tell others if you ask – maybe.
• A loyal customer will buy from you over and over again because you make it a no-brainer to do so. A satisfied customer will buy again – if it is convenient.
• A loyal customer is loyal because you continuously and routinely exceed their expectations. A satisfied customer has their expectations met - sometimes.
• A loyal customer is looking for, and gets, solutions to their business issues. A satisfied customer buys your products.
I recently came across an example of how inattention to moments of truth can negatively impact customer loyalty. Incidentally, I heard this story from multiple sources at unrelated events amplifying the impact, as I am sure I was not the only one who this story was relayed to. As a result of an acquisition, a computer retailer with local brick and mortar presence continues to advertise their services via the web. The consumer electronics company that purchased them markets the same products in the physical location at different prices and refuses to acknowledge the differences as well as fails to provide long time customers a reasonable and consistent solution, only excuses.
Because loyal customers typically represent less than 20% of your total customer base, on average, the remaining customers represent an opportunity for both you and your competitors. The opportunity is yours when you create and align your moments of truth to create a consistent value-based experience for your customers. However, the advantage goes to your competitors when you fail to provide consistent value and create a void in customer expectations. In the story above, leaders of the parent company created an environment where customers are now thinking about alternatives.
As you prepare for 2010, whom are you giving the advantage to?
Lead Well.
Rick Lochner
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