EXECUTION INSIGHTS

Bad Profits Undermine Business Success

bad-profit

“What’s been your worst day at work?.” I asked. “The day we got held up at gun-point”, she said, “but having a phone thrown at my head last week was a close second.”  I love stories like that. It gives me insight into human nature and the culture of the company. The clerk at the cell-phone store was great. I admired her for being able to stay calm under pressure. It’s a good characteristic in her role working for a company that treats its customers poorly.

I was trying to upgrade my wife’s phone. It was supposed to be a present on the day I’d asked her to marry me. Then we were going to go for ice-cream, just like we did that day 29 years ago. It’s our little “asking day” tradition.

I was so frustrated with the Byzantine rules around hardware upgrades that I asked how much it would cost to cancel my contract. “$45”, the clerk said. “Then go ahead and do it.”, I said. “I’ll have to call customer service.”, she said.

After two hours waiting I gave up. Even a company employee couldn’t get through to her own customer service department. I didn’t want to leave my wife waiting any longer so I just took the phone they had, paid my extortion money, er, upgrade fee, and we went for our ice-cream.

This is an example of “bad profit”. It’s what happens when you make that sale or serve a customer, but you do it in such a way that it leaves a bad taste in their mouth

MBWA.

What’s the solution I recommend for this company’s poor business execution practices and bad profits? Get dirty! Business leaders need to practice MBWA (Management by walking around), and spend more time on the front lines – preferably dealing with actual customers.

The best example I ever saw of this was an infantry Major who would literally walk from trench to trench. He gave his orders, and allowed his subordinates to develop and execute their plans.

Then he visited the front lines to see if his orders had been carried out. Sometimes he belly-crawled from trench to trench in order to maintain noise and movement discipline. Problems were fixed on the spot. Trenches faced the wrong way were dug again, machine-guns in the wrong place were moved; right then and there.

Then, and this is the key point, he would walk back up the chain-of-command. Back up through the sergeants, lieutenants, and captains to make sure the deficiencies in knowledge, execution, or misunderstandings were communicated and fixed so they didn’t happen again. Sometimes these conversations weren’t very pleasant. Sometimes they happened more than once, but they very seldom happened more than twice.

Everybody was now fully aligned in terms of expectations, and the major knew it, because he had personally closed the loop. And the wet-behind-the-ears lieutenants like me learned very quickly and very clearly what was expected of us. We became competent and confident.

Are you listening to your customers?

So business leaders, what are you doing to figure out why customers are throwing cell-phones at your front-line staff? Or worse walking away, quietly cursing you and vowing to never do business with you again if they can help it.

Your customers are talking about you. If you can’t hear it, it’s because you’re not listening. Spend a day on the front lines of your business dealing with customers.  The best leaders do this. They spend time in the trenches.

You don’t have time? That’s a poor excuse. You do really; you just think you have more important things to do. If you don’t make the time to really understand your customers, then don’t expect better business results in the future.

Big company?  Go down two levels on your organization chart.  I’ll be surprised if you don’t learn something important to improve your business execution.

And congratulations to my cell-phone provider on selling me a new phone I didn’t want to buy from you. I’ll remember it. For a long time.

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