Corporate Self-delusion

According to a Bain & Co. survey, corporate self-delusion is at critical levels, particularly as it concerns perceptions of customer satisfaction. The survey of 362 firms found that 80% believed they delivered a 'superior experience' to consumers. Yet only 8% of customers of those same 362 agreed with that characterization.

So why the chasm? One, companies are defining their own standards of performance. Two, they aren't looking broadly enough at the entire customer experience. It is critical that companies transform quality and service measurements according to customer expectations and experiences, not internal operational standards. Let's look at these two critical issues by picking on, say, randomly, a cable company...

Cableco says it has over a 90% satisfaction rating because they are arriving within a promised four hour window 94% of the time, and addressing the issue on the first visit 97% of the time. Trouble is, customers do not see waiting for half a day as good service, even when that time window is observed. Conscious of the value of their time, they want a narrower service window. Further, after a four hour wait, resolution on the first call is a considered a baseline standard for customers, not an indication of superior service.

Relatedly, if timeliness and first call resolution are the only standards Cableco uses to measure satisfaction, they'll overlook other critical touchpoints that impact customer experiences - from the initial call and ease of use of an IVR (Interactive Voice Response) system, to the physical appearance of technicians, through to the billing system and complaint resolution process.

Then, as competitors recognize the factors that are impacting the customer experience and make adjustments to their own policies to exploit them, Cableco will continue to hemmorage market share as their leadership gazes contentedly at a PowerPoint slide that reveals "90% customer satisfaction".

When it comes to customer satisfaction, measure the right things. Not just the easy things.

Confident Leadership

"The qualities that people look for most in leaders is not infallibility or infinite knowledge but confidence in themselves and in their group's collective ability to find a solution." - Jerry Colonna, Flatiron Partners

You have cash in the bank, a market-leading product, enviable market share, and the attention and affinity of analysts. Yet it is the confidence exposed and inherent in corporate leadership that drives morale. When it is said that companies succeed 'in spite of themselves', it is as equally likely due to this inability of leaders of companies in enviable circumstances to inspire and motivate employees as it is to complement leaders of an otherwise struggling organization with maintaining an environment of enthusiasm and dedication among employees.

If faced with being part of a currently leading organization uncertain of its circumstances, fearful of the future and unwilling to take risks, versus a struggling organization revitalized by a confident, encouraging leader; it is not difficult to determine to where the quality employees and smart investors will be drawn.

Yesterday means nothing, you don't lead from the rear.

720 Hours

I was perusing old Fast Company articles and stumbled across one from 2000 that highlighted a company called etime (I googled the company and discovered they were acquired in 2002 by TradeBeam, www.tradebeam.com).

In the article, it is pointed out that commerce technology's promise is not one way, and as the delivery of goods and services is sped through the introduction of new technologies, and suggests that accepted standards such as the 30 day due date for accounts receivable is a relic.

It sounds at first blush an overstatement, but upon refelection, if the issue were prepayment for goods and services with a thirty day delay before receiving them, it would cripple manufacturing (rendering JIT useless) and slow economic growth. What must be the as-yet unrecognized impact of slowed access to Accounts Receivable?

Treating your vendors well is a reflection on the brand, so this is an opportunity for creative differentiation in the market - at least as it impacts the supply chain. Certainly timely payment would be rewareded by vendors with discounts and better service, which is passed forward to the consumer.

So what argument still preserves thirty days (or more) AR in business to business transactions?

Perhaps this is yet another opportunity to rethink all of the ways the consumer is impacted by business decisions throughout the organization, and then re-create them to impact direct or indirect creative differentiation in the market.