WHY BIG COMPANIES SHOULD CHANGE FROM A TARGET DRIVEN CULTURE TO A CUSTOMER EXPERIENCE CULTURE

“Costs are short term. Benefits are long term.” Peter Senge

Why Big Companies Should Change from a Target Driven Culture to a Customer Experience Culture

 

Acknowledgement  Author: Diane Gray of Change Play Pty Ltd (www.getagameplan.com.au), edited by CCI

 

In reading ‘Our target-driven corporate culture is failing customers’ article by Simon Jenkins in The Guardian recently, it raised the argument that big companies cannot deliver quality customer service due to the rules and targets they instill to reduce costs and the result is “cheap, impersonal and poor services”.

Jenkins shares examples from the NHS in Britain, Oxford University and United Airlines where the culture of the organisation is not focused on delivering quality customer service, but instead there are internal rules and targets driving the bottom line results.

Jenkins states – “The bigger the company, the more it needs rules, targets and objectives to control operations and hold down costs. That means the less the company can tolerate discretion in its frontline staff, let alone in subcontractors such as air marshals. Big corporations are not subtle enough to mould the crooked timber of mankind. The money lies in straightening it.”

This is a strong statement, and does not leave much hope for big companies or their customers, never mind the people who work in them.

It is not surprising some big organisations are so rule bound because the top line decision-makers believe in the misconception that “the money lies in straightening it”. It sounds like a dictatorship trying to operate in a democracy, where the quickest road to an internally target driven outcome is to stop people thinking or having a say or using their initiative.

It reminds me of a quote from Peter Senge: “Costs are short term. Benefits are long term” with some big corporations operating on short-term gains, band-aid fixes, rules of control, and who will find themselves with unsustainable cost cutting that has very little, if any, long-term benefit.  

The irony is, the money being spent on making, implementing and policing the rules is not truly cutting costs – instead it could be invested into front line services. But when top-line decision-makers are so far removed from the front line, they truly have lost touch with what is needed at the direct contact service points with customers.

Another irony – the more problems arise, the more pressure to cut costs, the more complaints that come in – and then the first reaction is to make more rules to replace the previous rules that did not work! Einstein’s definition of insanity comes to mind – “Doing the same thing over and over again and expecting different results”.

Doing the same thing over and over again and expecting different results.”

Albert Einstein

 

Now let me be clear, we are not advocating for ‘no rules’. Of course, some rules need to be in place, but when do the rules become destructive to the organisation?

  1. When the rules become the values, and therefore the culture of the organisation.
  2. When the rules are more important than the customer experience.
  3. When the rules place more emphasis on shareholders then customers.
  4. When the rules inhibit or stop common sense decision making.
  5. When the rules are costing more than they are producing.
  6. When the rules are used as a weapon against the very people who generate the revenue for the organisation.
  7. When the rules forcefully do not allow for “moulding the crooked timber of mankind”.

And there is more!

Jenkins also states – “The essence of a service industry is the point of contact with the customer. From a yoga class or therapist to a decorator, a restaurant or a tour operator, we expect value to lie in the personal nature of the delivery. It lies not in product quality but in experience quality – in courtesy, humanity and kindness. We do not expect a difference between a first- and a second-class experience, between caring and not caring.”

If a company strategically places itself as a low-price market contender with low budget service, it does not abdicate them from the responsibility of caring for their customers. This should be a given for anyone in business, and in the workplace. Yet when the cost of rules means dragging a paying customer from their seat, because a rule of over booking created the problem in the first place, then something has obviously gone wrong in the company culture.

So yes, the target-driven culture is failing customers. This culture relies on serving top-line decision makers and shareholders before the customer, which does not make sense because without the customer, there is no business, so everyone loses.  But the customer is not a disposable item to be thrown away at a ‘rule’s notice’.

“Change is not always easy but staying the same is often harder and deadly to business, therefore the question needs to be asked – Can you afford not to change?”

Diane Gray

 

All too often these decision makers are so far removed from the front line, they have very little understanding of the customer experience. It’s the people at the front line, directly interacting with the customer and the customers that know.

If the rules and targets reduce the minimum value for money customer experience instead of exceeding it, or worse, the experience does not meet the over-professed company values, then the customer desertion rate and lack of customer loyalty to the organisation will be very costly indeed.  Yet are they listening?

At the end of the day, target-driven cultures do not build trust with either employees or customers, and they negatively impact directly and indirectly on the bottom line – so, why do it?

The good news is that it does not have to be this way.

As Jenkins stated, ‘we expect value to lie in the personal nature of the delivery’ and so we should. Any psychologist who has studied socialisation, attachment theory and the connection with learning knows that successful relationships, including business ones, rely on the quality of human interaction. Therefore, any customer experience where the customer feels they have been looked after in a manner that meets or exceeds the value of the exchange will be a happy one, and more likely to buy again, and refer to friends.

Now to do this does not mean ignoring the value rules or targets, instead it means there needs to be a compromise to create a win/win. It means building a company culture that values the customer experience as the best, most reliable means to build a successful business – no matter how big or small the company is.

The company culture needs to:

  1. Shift away from a purely target-driven culture to a quality customer experience culture.
  2. Value building relationships internally and externally to the company, based on trust.
  3. Have the guts and determination to resist the temptation to rule by rules, instead lead through learning and growing people potential.
  4. Develop a culture of resilience, making change the norm – unnecessary rules slow down change and compromises agility to respond to rapidly changing market demands.
  5. Have shared values from the top line (including shareholders) to the front line and beyond to customers.
  6. Authentically walking the talk to consistently build trust
  7. Be open to listen to feedback – employee and customer feedback.
  8. Be accountable for its social responsibility to customers and the community.

Changing culture can be the most difficult change for a company to make if not approached properly, and harder still to ensure the change is sustainable. Many companies give up and revert to target-based cultures because it is easier to measure quantitatively – after all, it is logical, black and white.  However this’d  decreases the change appetite of individuals and the organisation.

But a high proportion of customer service is not logical. The customer experience is emotionally driven, hence why it is an experience.  So challenge what is measured, ensuring it is attuned with the changed culture.

Change is not always easy, but staying the same is often deadly to business, so the question needs to be asked – can you afford not to change?

 

Written by Diane Gray of Change Play Pty Ltd (www.getagameplan.com.au)

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