The magic hour

The agility and responsiveness of an organisation can be measured by its ability to respond to a customer enquiry, comment or complaint within an hour. Those clever people at the Harvard Business Review have established that businesses that respond to customer enquiries within the hour are seven times more likely to qualify a sales lead than those that contact the customer even an hour later and more than 60 times more likely than companies that wait 24 hours or longer.  It is therefore  surprising to learn that the same Harvard study indicates that only 37% of businesses are actually able to manage a reply with the magic hour.

This is a simple, yet powerful dramatisation of the disconnect between real time and institutional time. Real time working and responding has become a mantra for our social age, but for the majority of organisations – hamstrung by tortuous internal approval processes, over-centralised decision-making and poor monitoring systems – it remains more of an aspiration than a reality. It demands a reappraisal and reorganisation of structures and operating procedures, but above all, it requires a change in organisational culture, empowering customer-facing employees to make decisions without the need to refer everything to their line managers.

It has become something of a cliche to reference online retailer Zappos as an exemplar of best practice, but it remains the poster child for employee-empowered customer service. One of the secrets to Zappos’ success is the quality of its customer-facing employees, who neither use scripts, nor are forced to keep their telephone calls with customers to a set time-limit: the longest call in Zappos history was a remarkable eight hours. The Zappos team can also, at their own discretion, send notes of apology or even flowers to customers who have had a bad sales experience, without having to go through the usual approval processes.  This is completely at odds with the tight way that call centres are typically managed, in which calls have to be processed in a set period of time, scripts cannot be deviated from and all decisions have to be referred to senior management. Zappos can operate in this loose way, not because it pays high salaries or bonuses – it doesn’t – but because it spends far longer recruiting and training its customer service reps than any other similar operator, putting them through a four-week immersion in culture, core values and service at its Las Vegas headquarters. New recruits emerge from this training programme with a profound understanding of the company’s culture and core values. Any recruit who doesn’t like it is offered $3,000 if they quit – a golden goodbye rather than the typical golden handshake. Around 10% of employees take the money and run.

This is what it takes to deliver within the critical one-hour time frame.  It isn’t complicated but it does demand investment, trust in your employees and senior management support.  Without this commitment to cultural and organisational change, real time customer service is merely an unfulfilled promise.

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The next big thing?

There have been plenty of false starts: for a time Quora looked liked being a contender, only to join all of the others on the list of social media platforms that almost made it.  But Pinterest – the visual social network – does look it will genuinely become the ‘next big thing.’  At present it is pretty insignificant in the UK with only around 200,000 users, but its spectacular growth in the US – where it was the fastest site to achieve 10 million users – suggests that it has a chance of becoming a mainstream platform.  It is easy to use, relies on a simple call to action – Pin It! – and appears to lend itself to commerce: it is apparently generating more referral traffic than Google+, LinkedIn and YouTube combined.  For any business selling products that rely on their aesthetic appeal - fashion, furniture, furnishing, cars, holidays – now is the time to take Pinterest seriously.

For a quick introduction to Pinterest, check out this video:

A marketers guide to Pinterest

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The end of the spinners

Few business functions have experienced the level of inflation in both status and salary enjoyed by the in-house PR professional. When I first started in the industry the corporate press officer was a relatively junior role, responsible for writing the chairman’s speeches and dealing with occasional press enquiries. The last 20 years has seen its elevation to the exalted status of the corporate communications chief – the person paid a substantial salary to polish the corporate reputation, keep the critics at bay and the stakeholders happy. They have done their job so well that far too many of their internal audiences – especially those occupying the c-suite – have bought in to the idea that the world around them can be controlled, critics silenced and crises managed. Unfortunately, in a world in which trust is at a premium, influence is dispersed and criticism is cheap, these masters (or mistresses) of corporate spin are struggling. Stories can no longer be buried with a quiet word to your mate on the city desk.

Many years ago I worked for a financial and corporate communications agency which used to go into client pitches with two boards. On one board was written the word ‘friends’ and on the other ‘control’. The message was simple, compelling and, given the spectacular growth of the agency since that time, highly profitable: ‘We are friends with the handful of people whose opinions matter most in the valuation of stock prices or forming of corporate reputations and we know how to control the messages that they receive and transmit.’

Things have certainly changed since those simple times. Authority and expertise have been dispersed to the extent that analysts are no longer reliant on personal briefings and are picking up their information from the web, and opinion formers are just as likely to be obscure bloggers operating out of their bedrooms as professional journalists or eminent academics. And the CEO is starting to ask why sites critical of the company are starting to appear at the top of the Google rankings. You are paid a big salary to stop this type of stuff from appearing, or at least that’s what you told them. Welcome to the new world of the public affairs or corporate communications director: chaotic, complicated and largely unspinnable. It requires a completely new set of skills, in which an understanding of social media, behavioural psychology and influencer marketing is far more important than a bulging contacts list on your BlackBerry. It is a world in which many of the people currently occupying the leading corporate affairs roles are going to struggle.

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The Myth of Co-creation

Co-creation is one of the many myths propagated by the apostles of web 2.0. They would have us believe that millions of consumers are actively involved in the creation of ideas and concepts for their favourite brands. In fact why bother employing an agency creative team when there are millions of wannabe creative directors out there, willing to apply their brains and ‘Magic Markers’ to your brief. We are all creatives now.

The reality, according to The Future Foundation, is that only 15% of British consumers claim to have participated in some form of branded co-creation. This doesn’t mean that people aren’t creative – The Future Foundation also claims that around 50% of consumers say that ‘expressing their creativity is important to them’ and 60% regard creativity as ‘a route to personal fulfilment’ – they just don’t necessarily want to apply this creative urge to your brand or service.

The vast majority of successful co-creation or creative crowdsourcing initiatives have been more a case of ‘expert-sourcing’: this is more than mere semantics, the distinction is important. During the summer of 2009 Unilever decided to abandon the usual practice of deploying an advertising agency on its Peperami brand. It dismissed the agency that had worked on the brand for 15 years and created the successful ‘bit of an animal’ campaign and instead offered a prize of $10,000 to any creative team that could come up with the best-executed idea. Although the Unilever spokesperson claimed that the winning idea could come from a ‘plumber from Barnsley’, the fact that the contest was being run through an online community for creatives called underlined how Unilever wanted primarily to attract entries from professional creative teams. The company also promoted the competition on the freelance recruitment sections of the major advertising and marketing blogs. It was therefore hardly surprising that the winning entry didn’t come from a Barnsley plumber, but from a former agency creative director working alongside a freelance copywriter. Nic Ray, speaking on behalf of the freelance creative community, explained the attraction of this approach for his peers: ‘ almost all agency creatives work on freelance briefs outside of their normal employ – and get paid substantially less than $10k for doing so. Here’s an opportunity to work on one of the UK’s most iconic (and irreverent) brands, pull out those brilliant back draw ideas that were never sold and have some fun shaking up the industry in the process.’

When it comes to involving members of the public it is far more appropriate for brand owners and agencies to talk about creative collaboration rather than co-creation or creative crowdsourcing. People are happy to collaborate on many different levels – depending on this level of interest in or enthusiasm for a particular brand or service – but you have to make it easy for them. Don’t give them a blank sheet of paper but instead give them the tools to customise and adapt. And don’t ask them to come up with ideas from scratch. Writer Eric Raymond used the metaphor of the ‘cathedral and the bazaar’ to describe two very different models of innovation within the software industry. The bazaar represents the loose, open source approach, harnessing the skills of the wider developer community, whereas the ‘cathedral’ represents the traditional, tightly controlled model. Raymond argues that both approaches are valid and potentially complementary, although the experience of the software industry suggests that the ‘bazaar’ is not particularly effective at originating concepts, which still rely on the spark of individual genius to make them happen, but is very effective at testing and improving them. So in the case of your creative brief, you still need the creative thinkers – working within the company’s or agency’s ‘cathedral’, to come up with the original ideas, which can then be tested and fine-tuned by the members of the ‘bazaar’.

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Death by Compliance

According to the Roman historian Tacitus, “the more corrupt the state the more it legislates.” The corporate equivalent is the weaker the corporate culture, the more it relies on rules, regulation and an all pervasive compliance function to try to control or police employee behaviour. We might accept that an expensive and overly bureaucratic compliance system is a small price to pay to protect the integrity of our institutions, but all too often it encourages managers to bask in the illusion of certainty and treat the symptoms rather than the causes of the corporate malaise. It is invariably easier to hire another compliance officer or to commission yet another audit than get to grips with a dysfunctional organisational culture or solve the problems that cause poor behaviour. The old IT cliché was ‘no one ever gets sacked by buying IBM’ and by the same token, managers tend not to be criticized for advocating stronger compliance, auditing and approval procedures, even when they don’t appear to add a great deal of value to the organisation.

Compliance has been one of the growth areas in business during the past 20 years. The major accountancy and consulting firms have been complicit – compliance represents a lucrative source of revenue – accompanied by nervous in-house legal advisors, spooked by the threat of increased regulation such as the ridiculously overbearing Sarbanes-Oxley. But has this compliance fetish made our institutions better equipped to deal with the problems that come their way or more adept at navigating an ever more complex regulatory and reputational environment?

I would argue that it has simply added a bureaucratic and cost burden. Imagine how much is invested by businesses and other institutions on compliance reviews that highlight problems but fail to provide solutions, audits that are designed to obfuscate rather than illuminate and strategic risk assessments that can’t anticipate future problems. The compliance culture has simply made weak institutions weaker. This was a theme explored by Francis Fukuyama in his book The Social Virtues and the Creation of Prosperity. He argued that what he described as ‘high trust societies’ enjoy enormous competitive advantages over ones that were dominated by mutual suspicion and therefore heavily reliant on tight, expensive and slow regulatory structures. High trust companies enjoy similar competitive advantages, investing the money that they would have spent on compliance and auditing on things that really do add value to corporate life. Culture will always be more important than compliance.

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What’s the point of HR?

W.L. Gore and Partners, the manufacturer of Gore-Tex, in addition to over a 1,000 other innovative products, has been described by Fast Company magazine as “the most innovative company in America.” It regularly comes top in rankings of the best places to work. Its founder Bill Gore believed in the importance of trusting people to do the right thing and in the unifying force of a strong corporate culture. He wanted to create a non-hierarchical, non-bureaucratic, self-regulating business, without rules, built around self-managed, small teams.

Over 50 years later, Gore continues to adopt a flat, team-based structure – they call it a ‘lattice structure’ – that is underpinned by a corporate philosophy that encourages initiative and a focus on personal fulfillment. You won’t find any organisational charts at Gore, any sense of hierarchy, job descriptions or prescribed chains of command. Decisions are made by those closest to a project, no one can be told what to do, bosses are described as ‘sponsors’ and teams largely self-organize around specific projects, typically without any pre-defined leadership.

Ann Gillies has the interesting challenge of heading the human resources function for W.L. Gore in the UK, which mirrors its US operation by rejecting a traditional hierarchy or formal job titles. True to the company’s ethos, there aren’t any HR policies and procedures. One of the practical benefits of this approach is that there is far less paperwork generated than in a typical HR department. It also means that the department operates with a much smaller headcount than the norm and allows the HR team to focus its time on the important stuff: helping people understand the Gore values and culture, rather than pushing paperwork around the office. In an interview with Personnel Today Magazine, Gillies explained how decision-making works within Gore: “We do need to make decisions here, we’re not a hippy commune,” she insists. “It’s about making sure something is happening, but not taking control – you’re not managing people, you’re letting the team work out the how and then get on with it …. I can imagine that in the military or in law enforcement you need some sort of control-and-command structure, but elsewhere, if you trust people, they will do a good job.”

This is the future of the HR function, as the guardian of the corporate culture, rather than the master of employee compliance. In fact, if HR departments renamed themselves as ‘culture departments’ and consigned the job descriptions and appraisal forms to the waste bin, they would almost certainly make a more effective contribution to corporate life.

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In Praise of Adhocracy

Like many smart ideas, Warren Bennis’ ’adhocracy’ – a word he devised to describe the antithesis of a rigid, centralised bureaucratic structure – has had to wait an extraordinary long time to become fully appreciated.  Bennis coined the word in 1968 in The Temporary Society (which he wrote with Philip Slater) to celebrate unstructured, agile and improvisational organisational models.  His thinking was subsequently taken up by a host of eminent business thinkers including Toffler, Mintzberg and Robert Waterman (Tom Peter’s collaborator on In Search of Excellence) who’s book, Adhocracy was published over twenty years ago.

The circumstances in which we now live have arguably made Bennis’ thinking more relevant than ever. New patterns of consumer behaviour and changing expectations, new technology, combined with a bewilderingly complex social, cultural, economic, political and environmental landscape, make the idea of an ‘adhocracy’ appear particularly attractive. Centralized, hierarchical systems made sense in a world in which information and knowledge were relatively scarce commodities and could be tightly controlled, but the decentralization of knowledge, brought about by the inexorable rise of the internet, combined with a collapse of trust in traditional sources of authority and expertise, legitimizes the creation of flatter, decentralized operational models.  Rapidly changing customer expectations are also forcing institutions to operate and respond in real time, placing a premium on agility, flexibility and an ability to improvise. Longer term planning and cautious, careful deliberation are increasingly becoming luxuries that few organizations can afford.  The adhocracy has finally found its moment.

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Digital Queue Jumping

According to The Observer, “Got a problem? Air it on Twitter and it could be solved instantly.” This headline will have come as no surprise to the social media fraternity.  Many have known for years that tweeting or posting comments about poor customer service allows them to ‘jump the queue’ when it comes to making complaints, but this knowledge is now beginning the penetrate the mainstream.  Why wait for days or sometimes weeks for a problem to be resolved when a bit of digital ranting can achieve an almost instanteous response?

The good news is that social media-enabled customer systems, when properly resourced, are far more effective than the alternatives.  According to Everything Everywhere’s Ben Kay, “Social agents are four times more efficient than telephone agents and result in better NPS ratings.” The bad news for organisations that rely on a large customer service function is that the maturing of social media as a customer service channel will dramatically raise our expectations: the more we see problems being resolved in real time the more we will come to see this as the norm. In the words of Gareth Turpin, General Manager of Customer Services at O2: “Customer service expectations are not set by what your competitors are doing but by anyone.”

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Boris’ Messy Road To Victory

My most recent book Loose was partly inspired by a Tom Peters quote: “in an age when all value flows from creativity and initiative, we must imagine and embrace a model of leadership that is loose, open and perpetually imaginative.” It is difficult to conceive of a looser leadership style than that embodied by Boris Johnson, the newly reappointed Mayor of London. His arch rival, Ken Livingstone has described him as “a lazy old fogie”, without the self discipline to be an effective politician: “He remains incredibly funny, but he’s not interested in detail. Unless you like lots of mind-numbing work, getting on top of budgets, crafting government policy and drafting strategies, you’re not doing it.”

Boris exhibits many of the characteristics and behaviours of those institutions that appear to thrive amidst the chaos of modern live.  We should never underestimate the level of calculation that goes into Boris’ bumbling persona, but to the public at large he comes across as unpolished and authentic, which is why he has been able to appeal beyond the narrow confines of Conservative party.  He is a flawed character, but that simply makes him even more appealing to a public that has always had a soft spot for loveable rogues: the public will invariably choose the interesting, flawed character over the ‘too good to be true’ product of the party machine.  He clearly has an inflated ego but he also appears to be collaborative: willing to delegate power and decision-making to trusted deputies. Livingstone would no doubt argue that this is simply a product of Johnson’s laziness and disinterest in the minutiae of bureaucracy, but it does allow Johnson to be able to focus on the big picture, rather than get too bogged down in the detail.

Abrahamson and Freedman in their book “A perfect mess” described how: “Though it flies in the face of almost universally accepted wisdom, moderately disorganised people, institutions and systems frequently turn out to be more efficient, more creative and in general more effective than highly organised ones.”  A perfect mess: possibly the best description you can find of Boris’ electoral juggernaut.

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Football Googles A Management Lesson

In the era of Balotelli and Barton it takes a brave (some might argue foolhardy) football manager to allow his players to come and go as they please and to trust them to manage their own time. But this loose approach to man-management has been one of the secrets of success of Brian McDermott, who’s Reading team was this week promoted to the Premiership.  McDermott was apparently inspired to implement a more relaxed and informal approach by a visit to the Google Mountain View offices in the US where personal freedom has become something of a religion.  Football managers are expected to study a business as part of their UEFA qualifications. Most tend to stay within the world of sport but McDermott wanted to try something different, hence his decision to study the weird and wonderful world of Google, in which employees determine their own working schedules and are given time to pursue their individual projects.

McDermott has tried to apply a similar approach to the way he managers his players’ time. In an interview in The Times he described how: “I don’t tell the players what time to come in. We start training at 11, but that’s it. I don’t mind what time they leave, whether it’s two or 10. They’ve really bought into it – we have to kick them off the training pitch, or they don’t get their rest … it’s a good environment.”

Of course, the real test of McDermott’s enlightened approach will come when one of the players (inevitably) steps out of line and takes advantage of the freedom he has been given.  Others, who have tried a similar approach, recommend the use of a “high trust/high penalty” policy.  You trust your employees as much as possible – based on the belief that people will respond to this freedom in a positive way – but respond decisively if anyone abuses this trust. This was the mistake made by Martin Johnson during England’s disastrous Rugby World Cup campaign. On the eve of the tournament he publicly declared his trust in his players and his intention to treat them like adults.  Unfortunately, amid tales of dwarf-tossing and drunken dalliances, he failed to crack down decisively when his trust was abused.