Tag Archives: Customer Service

Innovation Starts on the Front Line

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When I first began working for Soundview, I filled back-issue orders in the mail room. We had hundreds of print summaries of top business books, and through our catalog customers ordered them on a regular basis. However, I noticed early on that the order form was not easy to use if you wanted a lot of summaries. There was a series of blank lines on which you had to write the orders numbers, and there was no easy way to indicate if you wanted more than one copy of a title.

So I suggested to our publisher that we ought to change the order form to list each order number, with a space next to it for indicating how many copies the customer wanted of each title. Through this simple change our order volume skyrocketed.

Noel Tichy and Chris DeRose state a simple principle in their new book Judgment on the Front Line:

“In my experience, innovation can only come from the bottom. Those closest to the problem are in the best position to solve it. I believe any organization that depends on innovation must embrace chaos. Loyalty and obedience are not your tools; you must use measurement and objective debate to separate the good from the bad.”

Tichy and DeRose go on to provide a five-step process for leaders to use to build, or rebuild, their companies from the front line so that the ingenuity, innovation, and emotion of thousands of employees can be harnessed.

  • Step 1 – Connect front line to the customer.
  • Step 2 – Teach people to think for themselves.
  • Step 3 – Experiment to implement.
  • Step 4 – Break down the hierarchy.
  • Step 5 – Invest in front line capability.

The authors also bring to the table their extensive experience with companies from many industries that have learned how to harness their front line.

If you would like to learn more about how to harness your front line people to tap their insights and innovative thinking, then you’ll want to join us for our next Soundview Live webinar with Tichy and DeRose on March 27th. They will expand on the five steps, and provide examples of real-world use of these steps in successfully companies.

Perhaps you could even kick-start the process by inviting those who lead your front line people to the webinar. You can fill the room on one registration. Remember that all Soundview subscribers attend Soundview Live free.

How the Gilt Groupe Got Its Shine

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BY INVITATION ONLY

There is an old maxim that friends should not do business together since it invariably ruins the friendship. The Information Age has disproven this notion as best friends and college roommates have launched enterprises that eventually become billion-dollar companies (Microsoft and Google are two notorious examples). Perhaps one of the most engaging stories of friendship turned into entrepreneurial success is told in By Invitation Only by Alexis Maybank and Alexandra Wilkis Wilson. The relationship between Harvard Business School graduates Maybank and Wilson is so tight that the pair is known as A&A. However, By Invitation Only is more than a story of friendship, it is a story of how two smart young women leveraged their experience, intelligence, contacts, complementary personalities, careers, skills, and a passion for fashion into an innovative online enterprise called Gilt Groupe.

The Core Idea

The Gilt Groupe — co-founded by Maybank, Wilson, engineers Mike Bryzek and Phong Nguyen, and chairman and veteran online entrepreneur Kevin Ryan — is based on the idea of the “sample sale,” in which a very select group of customers is invited to buy (during a very small window of time) luxury brands at discount prices. “To savvy, fashion-conscious New Yorkers, a Louis Vuitton or Hermès sample sale was a drop-everything-and-run proposition,” the authors write. “Once there, you basked not only in the bargains, but in being part of (and often trampled by) an elite, stylish, in-the-know crowd.”

Gilt essentially brought sample sales to the Internet. The idea began with Ryan, whose French wife discovered a French “luxury private sale” Web site. Through a recruiter, Ryan was put in contact with Wilson, who had followed Harvard Business School with stints at Louis Vuitton and Bulgari. Uneasy with the idea of an Internet business, Wilson suggested her best friend Maybank instead.

Maybank joined Ryan but eventually realized that Gilt needed a high fashion insider with the right contacts and personality to lure the right high-end brands to the site — a job description perfect for her best friend, Wilson.

How to Network and Other Lessons

By Invitation Only describes the successful entrepreneurial journey of Gilt, revealing to readers the exhilaration and terror that launching, growing and managing a start-up inevitably brings. More than just telling a story, however, Maybank and Wilson want to help readers succeed in the way that they have succeeded, and therefore offer specific advice, often in the form of boxed checklists, on moving from an idea to a profitable enterprise. Extensive networking, for example, was a key factor in the successful launch of the site. In a chapter entitled “Networking to a Launch,” the authors offer a checklist that explains the rules for growing and maintaining your network. Another chapter describes how the co-founders laid the foundation for their viral business model. This chapter includes a checklist that enables readers, through a series of questions, to evaluate whether their business has the potential to be viral.

At the heart of the book, however, is the continuing friendship and collaboration (in that order) of Maybank and Wilson. The ultra-organized and cautious Wilson and the spontaneous, risk-taking Maybank complement each other perfectly. In an era in which company founders can end up on opposite sides of a courtroom, the story of the partnership described in By Invitation Only should be a primer for any friends considering going into business together.

How Excellent Companies Avoid Dumb Things

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DO CUSTOMERS CALL YOUR COMPANY ‘DUMB?’

About a month before your credit card expires, you lose it. You notify your credit card company, which sends you a replacement card with a new number that is valid for one month. Two weeks later, you receive your renewal card, also with a new number, to replace the one you just received. You think to yourself, “Why didn’t the company just renew my card four weeks early?” In other words, you are asking yourself, “Why did this company do this dumb thing?”

Although the title of his book has a positive spin, consultant Neil Smith’s book How Excellent Companies Avoid Dumb Things is, in truth, an explanation of why companies with supposedly smart managers and executives do the inexplicable things that make their customers shake their heads. According to Smith, the fault does not lie with the people who run the companies, but, instead, with psychological and organizational barriers that prevent those people and the companies they work for from doing the right thing — or at least the logical, intelligent thing.

In the case of the lost credit card, for example, Smith explains that the process of replacing a credit card and the process of renewing a card are completely separate. There is no process that allows card renewal to circumvent card replacement. At the two-year mark, a person’s card is renewed. Before that two years, even if it is only weeks before the renewal deadline, the card is replaced. Smith calls this the “Existing Processes” barrier. There are processes in place. However, there is no process that can change the existing processes.

A Promise: The Eight Barriers

According to Smith, there are eight such barriers that explain why companies do dumb things. Through clever wording, the first letter of Smith’s barriers make up the words “a promise,” which, he says, make the barriers easier to remember:

  1. Avoiding Controversy
  2. Poor Use of Time
  3. Reluctance to Change
  4. Organizational Silos
  5. Management Blockers
  6. Incorrect Information and Bad Assumptions
  7. Size Matters
  8. Existing Processes

Most or all of the barriers will be familiar to those in business. Most have seen a manager block a good idea from an employee because it threatened him or her in some way. The fear of controversy or the reluctance to change is a recurring problem either at an organizational level or an individual level.

Changing the Company

In eight dedicated chapters, Smith and his co-author, writer Patricia O’Connell, clearly explain and exemplify each of the barriers. Smith and O’Connell then lay out Smith’s 12 principles that serve as guidelines for the process of breaking the barriers. These principles range from having the process led by the CEO and ensuring that the people implementing the ideas own them to the importance of making the change process about culture change and not just a project.

Finally, the authors present a three-step, 100-day change process for breaking barriers that includes: surfacing ideas; rating the risks and debating the ideas; and reaching consensus on which ideas to implement. The process is led by a steering committee made up of the senior management of the company, driven by a full-time (during the 100 days) catalyst team that guides and monitors the part-time group leaders who lead the individual company units in the change process.

When combined, the 12 principles and the 100-day change process create an effective template for managers responding to the barriers that are hurting their companies. The greatest value of the book, however, is in the barriers themselves. Some business leaders may be horrified to realize how a particular barrier is costing the company significant cash and other resources — while some enlightened customers will say, “So that’s why that company does that dumb thing!”

Employee Loyalty Equals Customer Loyalty

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In a previous job, I worked for a woman who cared deeply about her employees. We enjoyed having every day off that both the post office and bank had, plus we always had the week between Christmas and New Years along with a Christmas bonus, on top of our regular vacation days. If your child had an event going on at school during work hours, she would encourage you to attend, and she was always interested in how our families were doing.

Her supportiveness resulted in a very loyal group of employees, ready to do whatever was needed to make the company successful. And this was especially evident in our treatment of our customers. We would go out of our way for them, because this was part of the overall atmosphere of the company.

Although this is certainly not a novel idea, loyalty seems to have taken a back seat to survival in the past decade here in the U.S.. While there has been a strong push for customer service, the employees have not always been taken into account.

In The Loyalty Factor, Dianne Durkin connects these two groups back together. Her Loyalty Factor is “Employee loyalty drives customer loyalty, which drives brand loyalty.” Some of her suggestions as to how to encourage employee loyalty include:

  • Communicate uniquely with each generation
  • Accommodate employee differences
  • Create workplace choices
  • Be flexible in your leadership style
  • Respect competence and initiative
  • Recognize achievements
  • Reward results

If you would like to hear more about Durkin’s thoughts on loyalty, you’re in luck. We’ve invited her to join us for our next Soundview Live webinar, Building Employee, Customer and Brand Loyalty, on May 15th. Register today and bring your loyalty questions to ask during the session.

Book Review: The Zappos Experience

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by Joseph Michelli

When business book authors seek companies that exemplify superior abilities in areas such as innovation, product development and talent development, a small list of names rapidly fills the pool. If asked, readers could name the top five with little effort: Apple, Google, Amazon.com, Facebook, and Procter & Gamble. In fact, the first three, respectively, are the top three companies named on FORTUNE magazine’s 2012 list of the 50 most admired companies. When the discussion turns to customer service, a new name joins the list: Zappos.com. In The Zappos Experience: 5 Principles to Inspire, Engage and WOW best-selling author Joseph Michelli explores the wildly different way of thinking that powers one of the strongest customer service engines in today’s global marketplace. The Zappos Experience is now available in multiple digital formats as a Soundview Executive Book Summary.

Michelli’s familiarity with corporate giants is second to none. His previous books have profiled Starbucks, Ritz-Carlton Hotels, and Seattle’s Pike Place Fish Market. If there is a single quality that distinguishes Michelli from his contemporaries, it’s his ability to blend elements of a company’s history with critical insight into how the company’s finer points can be replicated in the reader’s organization. Other authors get distracted by providing more biography than takeaways. Michelli’s five principles connect Zappos’ outstanding philosophy of building a great culture to a reader’s attempts to increase employee engagement, connect with customers and provide a truly exceptional service experience.

Zappos’ abilities as a service provider were a key factor in the company’s 2009 acquisition by Amazon.com. Readers will be fascinated by what Michelli discovered about the acquisition and the linchpin that helped Zappos CEO Tony Hsieh confirm the deal. Needless to say, Amazon.com’s third-place finish on FORTUNE’s most-admired list in 2012 is tied to some extent to Zappos’ service culture.

To download your copy of The Zappos Experience, visit Soundview’s Web site Summary.com.

Special Note to Soundview Subscribers! Don’t forget to listen to Soundview’s Author Insight Series featuring Joseph Michelli. He provides some additional insights about Zappos that you won’t hear anywhere else. Log in to your Soundview online library and check it out!