It's a slam-dunk…. Or is it?
There are many examples in business where process gets in the way of logic. Logically you would think that spending £1 million a year to gain £24 million is a no-brainer for a business of any size. However, here is an example of where this has played out in a global organisation.
A client firm was offered a solution to a specific business problem that was not available from any other provider at that time. However, the client firm was concerned that, because the solution wasn't available with any other providers, the firm might not be getting a fair deal. As part of its procurement process, the firm mandated the company pitching to go to tender for the project. Can you see where this is going?
Essentially this meant that the supplier had to facilitate competitors to pitch on its idea. Following the tender process, the client firm was concerned that the supplier might be £200 000 more expensive than the other options. Remember that the opportunity cost to the client was £25 million per year, and that the supplier had the solution ready to go. The client took two years to make a decision, at which point it chose the initial supplier, which was the organisation that pitched the idea in the first place.
The client lost £50 million in opportunity cost to make sure it wasn't spending £200 000 a year more than it should. Its process completely dominated logic. There is a good chance that if the client had paid the £1 million, it could have saved two years of time and taken a chunk of that £50 million in opportunity cost.
This story highlights the danger of allowing your process to dominate logic. We can all think of scenarios in which a business decision has been driven by process rather than by the opportunity that the decision carries. As businesses grow, they become more process-driven and they start to put each decision through the same process; whether it's for a £100 000 project or a £20 million project.
Sometimes you just have to let the logical solution take over and leave the processes behind. If a Formula 1 driver spots a gap in the race to jump up a few places to a pole position, the principal can't let that opportunity slip just because it's not on the race plan, but instead adapts the plan.
Emotional intelligence is more than a process
There is a lot of talk within businesses across all sectors about the need to have empathy. However, we believe that focusing only on empathy isn't enough. What businesses need instead is to focus on emotional intelligence. What's the difference?
Empathy often feels like a box that needs to be ticked. Are you empathetic with customers? Yes, good, job done. In some companies you can almost hear them saying, “If you want empathy, go down the corridor and it's the third door on the left.” This misses the point.
Emotional intelligence (EQ), on the other hand, is much more about empowerment. Empathy is a part of that, but when you focus on emotional intelligence within your organisation, what you're doing is empowering people to think differently and giving them the authority to make decisions that are in the best interests of your customers and, therefore, your business.
Rich's take
Would you like a free coffee?
Pret a Manger is a great example of a company that allows and encourages its staff to use EQ when dealing with customers. It gives its customer-facing staff the authority to give away a certain amount of free product each week, but it doesn't specify who should receive that free product.
It's at staff members' discretion who they give those freebies to. I benefited from this policy when I used to buy a coffee from a Pret store near my office every morning. One of the baristas who worked there got to know me and, some days, she'd spot me at the back of the queue and nudge me to the front, hand me a free latte and I'd be on my way.
Now, I'm sure that in many instances the barista had mistakenly made a latte when someone ordered a cappuccino, so she had a spare latte and would give it to me. But she had the power to use that mistake to delight a regular customer.
Principles guide the business
The reason that having solid principles is so important is that you can't possibly map every single customer journey or interaction, or predict every single reason that a customer might get in touch with your business.
What you can do is embed a set of principles so deeply into your company that everyone knows how to respond in any situation in a way that matches your brand.
Rich's take
Can you help us improve, please?
I've been a customer with Harry's, which provides a razor blade subscription service, for some time, and at Christmas the company emailed me about a special edition razor it was offering. It wasn't expensive at £24, and for an extra £10 I had the option of having it engraved.
I thought an engraved razor would make a nice gift for my son, so I ordered one. When it arrived, my first thought was that my order was wrong because all I could see was “Harry's” written on the top of the razor. Then I realised that my son's initials were engraved on the bottom of the handle, and the engraving was so faint I could barely read it.
It's fair to say I was disappointed, so I sent Harry's an email, explaining my issues with what I'd received. This was at 8 p.m. on a Thursday night. Very quickly, I received a reply from a lady who told me her name was Sunny. She apologised and told me that the money was already on its way back to my account. She also asked if I could take a photo of the engraving and send it to the company so that it could improve its engraving process.
Shortly after this exchange, I received another email asking me to rate Sunny out of five. I rated her five out of five. I then received another email that said: “Thanks for rating Sunny five out of five. What would you do for Sunny? Buy her a beer, give her a day off, or send her on a vacation?” All of this happened at 8 p.m. on a Thursday night for a £34 product.
Her response to my complaint was driven by the principles in that business because there is no way that she would have had a specific process to deal with a complaint about a faint engraving on one of the company's razors.
Compare and contrast that example about Harry's razors with another experience Rich had with a very different brand at a similar time. He wanted to test drive an £80 000 car from a luxury brand in preparation for an automotive presentation, so he contacted two dealers on a Sunday night to book his test drive. One dealer got in touch with him by lunchtime on Tuesday, and he's still waiting to hear from the other dealer he contacted.
That's a stark difference. Harry's solved a problem with a £34 product within minutes at 8 p.m. on a Thursday night, but a luxury brand, at best, took 1.5 days to respond to a request for a test drive and, at worst, didn't respond at all.
As a leader, selling the vision you have for your company goes hand in hand with embedding those core principles in the business. To get buy-in from not only everyone who works for you, but also your customers, you need to very clearly paint this vision from the outset. Without having clarity over this vision, you will also struggle to set the direction for the business.
“The best way I've found to open that aperture – without losing the focus – is to bring together a data-informed narrative that includes signals on brand relevance and saliency, consumer engagement, where consumer trends are going, along with quantitative marketing attribution (imperfect as it may be). Marketers are fundamentally storytellers, and it is incumbent upon us to shape a more nuanced story of what drives short- and longer-term brand success. Then, it's all about having a CEO and board who can take that in, and believe in it too.”
Marisa Thalberg, EVP, Chief Brand and Marketing Officer, Lowe's