Airlines are just like the childrens’ character, Noddy, who said, “When we build a house, let’s put the roof on first so that when it rains we won’t get wet!” The airlines are saying “There are those passengers who pay £200 and those that pay £2000. We will only carry the £2000 ones.”
This is like sawing the legs off your chairs and expecting the seat to stay in the air. Where do they think the big customers come from? They come from the loyal small customers.
The world has truly changed, producing threats and opportunities. The mega-corporations can no longer expect to have it all their own way. By having loyal, even, dare I say, fanatical, multi-tasked people working for you and the whole world to source products from, you can take on the biggest and win, but your customers will expect responsiveness and speed. Hierarchies just cannot work, people will expect a result whenever and wherever they contact our enterprise. Cheery helpful knowledgeable people who add value at every step – without them nothing works.
I read about each management fad, TQM, CRM, process re-engineering, excellence, change programmes, or even customer care. The day I read the book I am sold on it and then I watch as it fades and dies. Surely some of those ideas must have been good ones so there must have been some common fault - perhaps none of them carried their people with them.
Know where you are going and tell everyone else where you are going. Then you must expect them to help you get there.
Companies find adding value so hard, sometimes, that they abandon it, and, to my horror, some branches of this new religion called CRM (customer relationship management) actually encourage it.
There was a halfwit who was being paraded as the profit of CRM who suggested that quality and service could be dumped if one could determine, through CRM, that the customers were driven only by price and that those customers could be profitably harvested under those terms.
A supermarket chain was cited as a glittering example, their outlets are the sort of vast, grey concrete hangers, where sad people with snotty kids and fat arses waddle out with trolleys laden with dayglo orange and green soft drinks, forty pound bags of cheap chocolate marshmallows, and twenty four putty coloured loaves of sliced bread.
Too miserable and depressing to even contemplate owning a company like that, but should you be so full of despair and lacking in joie de vivre that you open one of these places in competition, try throwing in a smile, a bit of service, some knowledgeable people, and you will scoop the pot. They do not realise how vulnerable they are. No one in their game has nice, happy, value-adding people, so they believe, wrongly, that they don’t need them. Good people – your army – is the trojan horse that will allow you to tear those walls down.
Thought: if you are in a crap industry, just being consistently less crap than the competition will keep you ahead of the game.
Watch every customer contact and count how often your people ask for the business. Increase that number, increase your profit. Simple, huh?
What Marketing and sometimes sales really do is create expectations. People always buy because they expect something. Does everyone who works with you know what that customer expects and are they sufficiently equipped to deliver it?
At sometime or another everyone has a crisis in their life. These dramas are often career or business related, in fact it can often be the trigger for a new business to start. “I couldn’t get a proper job so I decided to start my own business.” Even in established businesses the helter skelter of world events can cause a few unpleasant surprises with slumps, downturns, financial troubles and even weird plagues all impacting on our business.
I am often asked to speak on ‘change’ and how to survive it. I even try to apply my thoughts to my own business but I think to describe what is happening now as change would be like coming home to find your house has been turned into an igloo, that your dog had sprouted wings and was gliding amongst the trees, and your children had become raspberry blancmanges. The comment, “Hmm, things have changed a bit round here” would somehow seem inadequate.
So, how do we gain from such events? The answer is, stuckness. Stuckness is a Buddhist, sixties, hippy sort of thing. As an ageing (or aged) hippy myself, I am a big fan of a book called Zen and the Art of Motorcycle Maintenance by Robert Pirsig and it is where I first encountered stuckness. Let me explain it for you. Imagine you enter a room, a room you often enter and leave without too much thought. Then one day, as you start to leave, the door handle comes off in your hand. Now you are stuck and you can indulge in some stuckness thinking. Do it with questions: what do door handles do? By revolving the handle, some machinery in the door converts rotary motion in the linear sliding of the bolt. Can I find a way of moving that bolt? Is the handle still attached on the other side? Is there someone I can communicate with who could release me? Can I leave by another route, the window perhaps? Why do I want to leave the room anyway?
Can you see what is happening? From a thoughtless routine visit we have developed alternative gameplay, mechanical understanding and new co-operative personal relationships.
When people talk to me about starting a business they tend to focus on their core skills, be it electrician, writer, hairdresser, or cook. Imagine an employee sitting in a room with a hatch in the left wall and a hatch in the right wall. The work comes through the left hand hatch, they apply their core skill to it (they write on it, wire it up, or cook it) and then pass it through the right hatch. They care little what is beyond those hatches, that outside the left hatch are design, sales and marketing, and outside the right hatch are packing, distribution and accounts. Now things are getting tougher we have a great chance to enhance our personal skill base and value by a bit of stuckness thinking. Where is the work going to come from, how can I tell more people about me, who can I team up with to move things forward, how can we make these things cheaper, how can we make a bigger margin, and how do I get paid quicker?
Stuckness – try it, you could end up stronger.
Before we start, I have to ask you, do you know what empowerment really means? The reason I ask is that as the popularity of this buzz word has grown, I have had more and more people ask me about it and one incident focussed on the problems involved.
I received a phone call from the el supremo of a large carpet manufacturer. “Mr Burch, I want you to come and empower my staff.” “To do what?” I asked. “To move us forward through empowerment into the upturn!” “Empower them to do what?” I asked. “Empowered, er, empowered, ah, empowered to move ever onward!” “What do you want them to be empowered to do?” I asked again. “We want them empowered…to do what they’re told. We want you to empower some discipline into them.”
I explained gently that empowerment, in my opinion, was about transferring executive decision making from the very top of the organisation to the front line. In other words, everyone could make profitable or business friendly decisions regardless of rank. The benefits are that it can save money and it can make money. At the sound of the word ‘money’ this CEO perked up and asked for more information. I explained that in his case the people at his front line with constant customer contact were his carpet fitters – and that they should be the first to be empowered. “How would this work?”
Imagine having a carpet fitted when you notice a small fault. You say to this now empowered carpet fitter, “Excuse me, there seems to be a difference in the pattern.” The fitter replies, “Oh yes, I am terribly sorry, you must be really disappointed. What would you like me to do about it?” “What can you do?” “Anything you like!” “A refund?” “Of course, what shall we say, £30? £40? Shall we say £50?” With that, the fitter takes out a bundle of fivers from his pocket and counts ten out. “Fifty! Are you sure you are happy with that?” “Oh yes! Delighted! Thank you.”
After I had presented my theories, there was a moment’s stunned silence…then uproar. “You are raving mad! Are you seriously suggesting we give our fitters cash? You said this would save us money – it will cost us a fortune.” “What’s wrong with giving the fitter cash?” “They’ll clear off with it, that’s what.” “What sort of people are you employing, then?” “The sort that would run off with our cash, that’s who.”
We were both right, they did have a problem with trust. Empowerment does allow a flexibility that is open to abuse. So why take the risk? You only have to see the current behaviour of the fitters to understand why. “Excuse me, there seems to be a difference in the pattern.” “Oh yes, I’m not surprised, these carpets are rubbish – bloody hard to fit as well. If you think that the pattern is strange, you wait ’til it starts to smell!” “What are you going to do about it?” “Can’t do nothing about it, got twenty four more of these rotten things to fit today. You’ll have to ring customer service.”
Shall we stop here for a think, because things are not as straightforward as they seem. Did you hear him mention the other twenty four carpets? What do you base his bonus on, the number of carpets fitted or his attitude to the customer. I don’t think you can do both so on the face of it empowerment could affect numerical productivity – and did you recruit for attitude and honesty or did you recruit for skill? Consider recruiting only for attitude and then training for skill.
To continue with our story…you ring customer service. “I’m Janeeeeece, thank yew for calling Acme Carpets. Can I inform yew that a carpet is a naturally woven product and one can expect differences in colour and pattern. If you aren’t happy with that, then up yours.”
Now the customer has two choices, both of them bad. Either they can walk away and never return – this may not feel the worst but it is. No company can afford to lose customers. Second worst is that the customer or client bubbles up through the whole organisation, seeking satisfaction, gathering ire and expectation like some infernal snowball until they reach the CEO and say, “I WANT A FREE HOUSE FROM YOU.”
If you are a senior person reading this maybe you have wondered why the customers who get past your gatekeeper have such outrageous demands. Maybe it is due to a lack of empowerment lower down.
To try and understand the dynamics of empowerment I have tried to find a model that doesn’t have its waters muddied by all the other tensions of modern business and I’ve chosen a medieval example. The old baron has died and the eager younger baron has inherited the estate. He is terrified at the state of the finances and the negative cashflow (isn’t it funny that it nearly always takes new management to find these things out), so he calls in the management consultants and, because we are talking Middle Ages here, his firm of choice are Machiavelli and Co. They suggest that the first thing required is a staff audit. When this is completed the picture is clear.
“Here is your problem. Head office, or the castle, as you call it, you’ve got your peasants, smiths and millers – marvellous productive profitable people, but in the castle you’ve got the knights, the ladies in waiting, accounts department, jesters, marketing, minstrels and human resources. You can get rid of all of them and you will get what we call a ‘flat organisation’. In other words it will simply be, baron and peasants, peasants and baron. Peasants work, baron gets money. Direct, simple, flat, no middle.”
This the baron does and in moments the profits roll in, costs are slashed. Just like every bank, travel company and out of town retailer has discovered, the next discovery is not so amusing – namely the competition. The baron next door, who is acquisitive and aggressive, is moving his army on to our baron’s border. Our hero calls back the consultants in a high state of alarm.
“Know what” he wails, “I have no army. You made me get rid of my fighting people.” “Empowerment” is the reply. “Em, what?” “Simple. Empowerment means that you must arm your peasants.” “You want me to give my peasants guns? Are you mad?” (I get a whiff of the carpet fitter here) “What’s wrong with that?” “What’s wrong? I tell you what’s wrong, my peasants hate me. If you give them guns, the first person they will shoot is me!”
If you mistreat, underpay and under-inform your people, any weapon they get – financial or percussive – will always be turned on you first. “You’ve got a point, but we have a solution. We won’t give them any ammunition so to the outside world, they look armed, but in reality they have no real power at all.”
I had cause to stay in a business hotel where it is fairly bland but the food is truly awful. Being semi-automatic service there isn’t really anyone to complain to, so I don’t, but if I can I avoid staying there. Then one day I was forced by circumstances to book in. The next morning I was surprised to be greeted by a smiling woman in a smart business suit who said, “I’m Susan, your hostess. I would like to take this opportunity to thank you for staying at Gulag Inn and would like to check that every aspect of your stay was satisfactory.” “Well actually it wasn’t. The food was truly horrid.” She returned a look of panic as gear wheels in her programme jumped and grinded. She finally regained her composure as she caught the eye of the guest behind me. “I’m Susan your hostess. I would like to take this opportunity…” An unarmed peasant if ever I saw one.
It stands to reason, then, that we must make our people love us, they must understand that the way of life they will defend is better than the invader one – and to quote another tired business cliche – they must become stakeholders. So, now they love us and they share our goals. Can we arm them now? You have got to be joking. Can you imagine peasants let loose with sophisticated battle weapons – they would be shooting each other in the bottom and themselves in the foot; they are going to need training.
So we have trained, well rewarded peasants who love us. Perhaps it is a bit insulting to think of them as peasants – perhaps we could call them our empowered troops. A bit towards square one, maybe, but still a great improvement.
Empowerment is about every single person who works with you becoming a profit centre. Everyone, when correctly empowered, can add value. The route is rocky but the rewards are beyond belief.
Empowerment – a very dangerous but a very profitable word.