The traditional organisational model is rooted in the paradigm of the industrial revolution, i.e. the pyramid – ‘leaders know best, instructions flow down. The leader is the instructor, people are waiting for their instructions.’
In a modern, fast-paced business environment, this makes it too easy to rely on a few smart people at the top, and means that employees are directing their energy and effort up the pyramid.
If people are looking to their boss to tell them what to do next, the knock-on effect is that they’re often working to please the boss (or get them off their back.) If sales people or front-line staff – those that traditionally have the most customer contact – are constantly focused inwards towards business concerns, this means they’re facing away from the person who matters most: the customer.
Rather than putting the boss on top, businesses should turn their pyramid upside down and make customers the focus, not the CEO.
Doing so requires a structural shift, and the key is the leaders themselves. There has to be a shift from a ‘tell’ mindset to an ‘enable’ one. The leaders should create the conditions for people to succeed and remove the obstacles that get in their way.
We worked with Marks & Spencer in the early 2000s after the business had experienced a collapse in profits. They called us to experiment with new ways of working to improve financial results in nine stores.
In the footwear department, for example, a diktat was sent from head office telling shop floor staff to arrange every eight stools in two rows of four.
First of all, the sales advisors found this micromanagement incredibly patronising. This was exacerbated by the fact they knew it was a ridiculous idea. They understood from experience that customers don’t want to sit directly next to each other when trying on shoes. Eight stools would be available, but only four would be used at any time.
Staff therefore took matters into their own hands, laying them out in two sets of stars so that no stool was next to another. This achieved a 9% increase in sales in one week. Teams who see customers in action all day long have plenty of ideas for small adjustments to make things better for the business, and more ownership because they’re working with their own idea.
By allowing staff freedom – enabling them to make changes – M&S encouraged happier employees, happier customers and a healthier bottom line.
Empowerment depends on clarity
In theory this all sounds great: empower employees and they’ll respond with brilliant ideas and everyone wins. But a high level of freedom without a high level of clarity results in anarchy, just as the high level of clarity and low levels of freedom in the classic organisational pyramid encourage robotic, non-intelligent compliance by staff.
The sweet spot is actually high clarity and high freedom, which sounds counterintuitive but isn’t. It just needs to be the right type of clarity: less instructional (‘I know best, and I need this to be done that way’) and more destinational (‘This is where we need to get to, but we’re relaxed on how you get there’). By describing the destination rather than the journey, managers give teams the freedom to think about intelligent, creative ways to get there.
Of course, high clarity and high freedom require high levels of capability: it’s much easier to devolve control of people who are capable and experienced. The active bit for leaders is therefore to deliberately and intentionally grow people’s capability so they can devolve control.
Meeting expectations isn’t enough
Gallup has conducted interesting research showing that seven out of ten customers leave shops because they’re treated with an attitude of indifference. The correlation is clear: people’s engagement with the job transfers through into how they deal with customers.
Leaders’ focus on empowerment, engagement, freedom and clarity shows in customer satisfaction. You want to foster a culture of going above and beyond. When most businesses talk about delivering for the customer, they’re solely talking about meeting expectations.
This works, to an extent – 42% of customers will come back to a store if they have their needs met. That’s not bad. When you exceed expectations, however, their loyalty doubles and advocacy triples. And this is why you need to foster a culture of engagement: you want employees interested enough to create magic moments for customers – those personal experiences that will stick in a customer’s mind and keep them coming back.
My final point, and one of the most crucial, is this: the thing that makes the biggest difference to employee engagement is their immediate line manager. Gallup, again, says that 70% of a person’s engagement at work is based on what their immediate line manager does; whether they give praise, show genuine concern, provide the tools to do the job. If you want your people to deliver for the customer, then in a sense, you’ve got to treat them as if they're your best customer.
It’s only when people feel they're valued and treated with high levels of care and concern that this will translate into how they engage with the customer. Engagement is the foundation on which you're building your customer experiences.
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