Western countries have now moved from a supply economy, where we made things and sold them to customers, to a demand economy, where the customer is increasingly in control. As a result, companies large and small are struggling to adjust to this radical shift in power. The exponential growth in cocreation of new products and services is just one clear example of the impact of this change.
But even in the so-called developing world, that change is taking place, fueled by global access and distribution and enabled by the Internet. It is truly a global village. I was recently working with a large company in Pakistan that had grown massively in just under four years. Amid all the recent political and military turmoil, I was conducting service-excellence training for 850 executives, managers and team leaders.
Company executives had recognized they needed to change their business model if they were to continue to grow and prosper, particularly in light of international competition in their local market. They are planning to move their sustainable market differentiation away from products to the customer experience by focusing the whole business on service excellence and living their service-focused values through the behaviors at all levels. Their values are truly world class and would not look out of place at the Ritz-Carlton Hotel Group or First Direct bank in the United Kingdom, both acknowledged leaders in service.
‘If the frontline people are empowered, what will our role be in the organization?’
One word dominated conversations in Pakistan, a word guaranteed to strike fear into many junior and middle managers: "empowerment." "If the frontline people are empowered," managers asked me, "what will our role be in the organization?"
Tom Peters would argue that they don't have one; that the middle-management layers need to be stripped away to put customers, and those who serve them, as close as possible to the executive decision-makers. Peters often overstates his case to shift the norm of management thinking; however, he does have a point. Many executives are simply too far away from the sharp end of their businesses to make effective decisions in the new demand economy.
Central point
But the main reason why empowerment is such a key enabler of a customer-centric business is because the people who deal with customers are the best ones to understand the customer's real needs and resolve issues at the first point of contact. If they are empowered, they can interpret policies and business rules and even flex processes, if required, to ensure customer satisfaction. Most of all, they can identify all the errors and inconsistencies that really irritate customers and lead to defections. Amending these errors and inconsistencies will not only improve customer satisfaction, retention and loyalty, but also it will greatly reduce operating costs. It won't do employee morale any harm, either!
In my experience, you simply cannot design systems and processes well enough to guarantee customer satisfaction for each customer. At best, you can optimize them for different customer groups or segments. But if you want all your customers to be satisfied, it has to be left to the people interacting with the customer to decide how that is done. And that means empowering them to be able to make real decisions.
However, empowerment, by itself, is not enough. Waving Harry Potter's wand over the organization and saying, "You're all empowered," is more likely to create chaos than increase customer satisfaction. Empowerment gives employees permission to make decisions, but employees also need to be enabled.
The company in Pakistan had empowered its people at all levels, but nothing happened; they weren't enabled to implement it. "Enabling" means a myriad of actions, including defining the levels of decision-making authority and training and coaching your people on how to apply this flexibility; defining the governance for reporting issues and managing change; modifying the performance metrics to enable employees to focus on customer engagement, rather than volumetric measures, such as sales volume or contact handling time; providing employees with all the information they might need during the engagement and the tools with which to analyze it; and designing processes around customer events, rather than functional activities. Without fully enabling employees, empowerment is, at best, ineffective and can be extremely frustrating and, at worst, potentially dangerous.
Many managers reluctantly accept empowerment for their people but secretly wait for things to go off the rails, so they can reassert themselves and justify their role as controllers. The sad fact is that command-and-control organizations are easier to manage than empowered ones; however, empowered organizations are infinitely better for customer end employees. Which is right for your firm?: "You pay your money and you take your chances."
Arguably, the more customer-centric your organization becomes, the more the customer experience is jointly created by the customers and the people they are dealing with. In that case, empowerment is no longer enough; it's just the starting point. Beyond empowerment, if you want raving fans as customers, your employees have to be raving fans of your company. That means releasing the passion of all your people, particularly the frontline teams.
When I was a major account manager for an IT company, my CEO called me into his office and said, "David, you are screwing the company!" I asked why he thought this, and he said, "Because your customers trust you." I was, and still am, passionate about customers. And I am not alone. The vast majority of people who work in customer-facing operations are also passionate about customers, but they are seldom allowed to exercise that passion. That is a shame—for them, for their customers and for their company. In a world where web sites, call centers, sales brochures and even advertising has become milquetoast, passion is rocking horse manure.
So take a leaf from the books the leading players in the market—Southwest Airlines, Ritz-Carlton Hotels and First Direct—are writing Unleash the passion and enthusiasm of your employees by empowering and enabling them to create outstanding customer experiences—then watch your P&L improve.