Recently, I had a very candid conversation with a CEO who I’ve known for a long time but who has never shown much interest in elevating service at his business. During that conversation he said something like, “Joseph I know you believe service is an important value proposition and intuitively it makes sense BUT I can’t monetize the value of service”

Well, I am glad I had reviewed Service Economics by Downton, Rustema and Van Veen before my CEO friend shared his quandary. As you probably know Service Economics was based on three years of research funded by Oracle analyzing the service industry. The goal of the research was to uncover and understand productive service strategies and examine if excellent service really did produce tangible financial rewards.

So imagine you are a fly on the wall, as I gear up my response to my CEO friend…

I write everyday. At present, I am working on a book under contract, finishing revisions for a publishing agreement on my next book, and working on a collaboration document involving a company for yet a third book. So put simply, I write.

Unfortunately, all too few writers will ever be able to write as effectively as David Ogilvy. Ogilvy used words to sell. He was a craftsmen who demonstrated that the written and spoken word must stir emotions in order for people to get up out of their chairs and go shopping. He believed it was less about the “what” and more about the “why” that turned people into customers.

Today consumers have become more protective of their hard earned dollars and advertising messages deluge us, but Ogilvy’s simple truths about creating experiences through marketing materials seem timeless.

It had been some time since I heard about them but this week they kept finding their way into my conversations. At a large independent retail conference they were a central point of discussion, while working for a major metropolitan design center client I also heard my share about them. Who are they? Direct Buy of course.

My friend and colleague Doug Fleener once described the possible downside of Twitter as being like a “Chamber of Commerce meeting where everyone is selling and no one is buying.” It’s great to have friend’s as smart as Doug because they force you to think about things differently. Ever since Doug shared his observation, I’ve been looking at Twitter, social networking, and business communication quite differently. Let’s focus on the Tweet….

Most people I know who use Twitter desire a large base of followers. In fact, I heard a presenter on social networking emphasize that “you should do whatever it takes to get as many followers as possible.” She went on to offer various tools including for fee services where I could pay about $150 dollars and be guaranteed 3,500 new followers by morning. It led me to ask the presenter if objective for Twitter, is to be
the person who “bought the most followers.” Now you see why I am typically a presenter and not a student in class.

You have probably heard the well-worn phrase that “knowledge is power.” I think that’s wrong! Knowledge is just that – knowledge. Unless information is put it into action their is no power in it. Lets take the knowledge that you’ve collected on your best customers as an example. Assuming you have taken a great interest in your customers and collected a considerable amount of information about them, the power of that information or knowledge is only as effective as the action you’ve taken on it. Agreed?

On occasion, my father would begin to make a point with the phrase “if I had a dime for every time…..” and finish it with something like “a politician made a promise they did not keep – then I would be a rich man today”

With inflation, I’ve decided to modernize my father’s speech style by saying “if I had a dollar for every time someone asked me to join their affiliate program, write a book about their product, endorse their book, etc. I would be a much more affluent man today.” But, what if I actually joined all those affiliate programs, accepted every paid endorsement that came along, or felt compelled to be “nice” by blending my brand with anyone? Would I be wealthier or poorer for it?

When economies tighten there is even greater talk about the importance of “strategic alliances.” While much of this talk comes from people looking to connect with a big referral source, some of the energy behind business affiliation makes sense. But here are a few guideposts to consider when you are throwing your brand equity in with a “strategic partner”:

As a business owner and consultant, one of my favorite phrases has been “how do you know?” For example, I might ask a CEO of a business that I’m consulting with about their overall level of employee engagement and after they give me their subjective assessment, I typically spring the follow-up question “how do you know?” The purpose of my question is not to put that person on the defensive, but merely to help clarify the data upon which a person’s conclusions have formed.

The question “how do you know” is one I apply to my open business on a regular basis. For example, I might reflect on the overall health of my business and give it a letter grade of a B+ or an A- suggesting there is always room for improvement. When I drill down deeper on the evaluation, however, and ask how do I know it’s an A- and not really an F-, I start to define the metrics upon which I can more objectively forge my opinion, worse yet I find many metrics that are lacking.

Some time ago, innovation consultant to Fortune 500 companies and author Gregg Fraley blogged that “Starbucks is Dead.” He went on to acknowledge that his comment was a “bit of an overstatement.” But he made the observation because of his experience. According to Fraley, “Starbucks has gone from a ‘highlight of my day’ to one of avoidance.  Why do I see Starbucks as dead? Because when I go its dirty, crowded, and often staffed by dizzyheads who don’t leave enough room for milk.  And, this hurts the most to say, the coffee itself has slipped.  I still find good cups at Starbucks, but not always.”

Given his expertise as a creative thinker, Gregg went on to note that in preparing his blog he “stumbled on My Starbucks Idea — a site for consumers to post ideas for Starbucks consideration.  In just a few days participating I’ve noticed real ideation, real dialogue on the site.  It’s a good signal.  The heart stopped but it’s beating again.  If they want to continue the recovery they’ll not only listen, they’ll take action on the ideas that have been posted. Lots of action!  Good luck Howard!”

Here is a quick “what would you do if” quiz.

Assume you take over leadership of a troubled work team or organization. Your employee engagement scores, customer engagement metrics, and performance measures all reflect significant cultural chaos. Which of the following approaches is mostly likely to achieve an effective cultural revolution:

a) (since crisis requires a direct approach) immediately impose your authority and control,
b) (since buy-in is essential to change) immediately seek input from employees and increase employee empowerment,
c) (since such dysfunctional cultures seldom change) get your resume prepared so you can find alternative employment soon.

While every situation is different and many effective leaders might stabilize the crisis by taking a directive approach, the science of employee and customer experience management suggests that option B – the listening and measured empowerment strategy – is the best long term course of action.

A clearly defined business strategy makes tactical decision-making easier. Let’s take the case of Home Depot, one of the major US-based home improvement big box retailers. Home Depot competes aggressively head-to-head with the Lowes brand. Home Depot’s story is well-told in the 1999 book Built from Scratch: How a Couple of Regular Guys Grew The Home Depot from Nothing to $30 Billion. In the book, Bernie Marcus and Arthur Blank, cofounders of the Home Depot, share how they built the first national chain in their industry by concentrating on three things 1) low prices, 2)customer service, and 3) strong leadership values.

Many might argue that service, pricing and values at Home Depot all hit a low in January of 2007 when its chairman, president and CEO Bob Nardelli resigned from the company. During Nardelli’s time atop Home Depot the company lost market share to Lowe’s and Home Depot stock fell 8 percent. Despite that poor performance, Nardelli left Home Depot with a $210 million severance package involving cash payments, stocks awards, and deferred stock options.