Leader's Digest #22 (15 December 2018)

LEADERS ISSUE 22

15 December 2018

DIGEST

Building a Culture of

Service Excellence This fortnightly publication is dedicated to advancing civil service leadership and putting it into practice contemporary leadership principles.

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PUBLICATION TEAM EDITORIAL

Editor-in-Chief Segaren Assistant Editor Yvonne Lee Diana Marie Capel Graphic Designer Awang Ismail bin Awang Hambali Abdul Rani Haji Adenan

CONTENTS

ISSUE 22 I 15 DECEMBER 2018

04

HOW CUSTOMER SERVICE HAS CHANGED AND HOW TO STAY AHEAD

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HOW A BAD CUSTOER EXPERIENCE TOTALLY RUINED MY HOLIDAY

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FIVE PEOPLE MANAGEMENT HACKS FOR THE DIGITAL ECONOMY

10

THE BEST WAY TO CREATE YOUR DESIRED CULTURE: WALK THE TALK!

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“

HERE IS A POWERFUL YET SIMPLE RULE. ALWAYS GIVE PEOPLE MORE THAN THEY EXPECT TO GET.

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- Nelson Boswell

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How Customer Service Has changed And how to stay ahead

BY CAROLINE ONG

Nowadays we, as consumers, get more and more choices.

It is certainly not surprising that, fuelled by technology, our expectations have also become increasingly sophisticated.

Even when we got a last-minute long weekend extension for our Kuala Lumpur SEA Games medal haul, it was easy for many Malaysians to quickly check out the available reviews of sales in the malls (and perhaps accidentally buying a coffee grinder like yours truly), book a quick road trip, including accommodation and food or perhaps just take the opportunity to renew one’s gym membership with free personal training sessions thrown in.

Wow, what ease to get good deals at such short notice. All possible because it is easy to compare what is available in the market and the different pros and cons as experienced by different actual users.

And that is how Industry 4.0 will be – the convergence and integration of physical and digital worlds into one.

Now, companies are racing against time to redefine their offerings and services to customers so that the merged worlds will work for the company instead of against them.

Especially since the “Industry 4.0 engages customers” report from Deloitte University Press estimated that about 50% of S&P 500 firms will likely be new companies due to digital disruptions and that the survival of companies will hinge on their ability to change with times.

Even today, services are being personalised for different needs and customers have the ease of online purchasing and payment as well as distribution.

Furthermore, there is a shift in human structural belief systems from established institutions (think: governments and banks) to reviews from strangers (think: Uber, Airbnb, Trip Advisor).

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While the benefits are reaped by consumers, companies are also benefiting from being able to use data analytics to harness preferences and purchasing patterns – do you notice how the ads in Facebook and Instagram are getting increasingly accurate to your recent online searches or purchases?

SPEED AND EXCELLENCE OF DELIVERY

What this means to companies is that they must up their game in terms of customer service, being able to consistently anticipate their prospects and clients, as well as keep their internal brand advocates i.e. employees.

This stretches across the entire customer experience, as different points of engagement with the customers must deliver their own value and contribution. Today’s customer compares speed of response to their queries, comments and service received.

It is an “instant” and “live” world where a multitude of different folks and angles are being constantly updated. It is almost like having a perpetual 360-degree microscope and CCTV on companies’ service level to its customers.

For example, on Facebook, to qualify for the “Very responsive to messages” badge, the company needs to be responding quickly and consistently. This means that the company page must have achieved (over last seven days), both a response rate of 90% AND an average response time of 15 minutes to private messages sent to its page.

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This is no small feat and companies need to have a good social media strategy and execution to get this badge of honour, which translates to increasing credibility on its products and services.

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CUSTOMER SERVICE IN INDUSTRY 4.0

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In this fast-changing landscape, therefore, it is ironic that society has even more appreciation for the humanistic representation of life. Today’s customer values authentic, non-robotic responses.

Besides, engaged employees have long been demonstrated as having a positive impact on customer experience.

This could be in the form of a good sense of humour such as those demonstrated by myBurgerLab during its introduction of the Nasi Lemak Burger and the string of subsequent comparison comments cum reviews.

The evolution of companies in terms of customer service in Industry 4.0 also needs to take into consideration how to attract, develop and retain employees to be delivering these unique, authentic and WOW experiences to its customers.

At the same time, customers also value a genuine demonstration of the care and concern that companies or their employees have for its customers instead of being only driven by revenue and profitability. For example, the online retailer Zappos has long been looked at glowingly for its customer service.

One of its employees had made a call as part of its customer service process to follow up with one of its customers, Zaz Lamarr on the overdue return of some shoes.

It was unfortunate that Zaz had just lost her mother and the company reacted admirably as it had not only arranged for all the necessary returns of the shoes without cost, it went the extra mile.

Zappos’s sympathetic gestures of sending flowers to the grieving customer had rave reviews online which, in turn, certainly created positive word-of-mouth and loyal fans!

This is something which the convergence of the physical and digital realms of Industry 4.0 enabled the company to do. In doing something extraordinary for its customer, it reinforces the affection that customers have for Zappos and its famed customer service culture.

HAVING THE RIGHT TALENT

Attracting and retaining digital natives – who are comfortable in this digital eco-system – is vital not only to provide the experience which is expected, but also to think in the shoes of the customers to innovate and deliver new experiences.

And the other employees who may not be as natural in the digital eco-system, will also need to be convinced and upskilled to switch easily between the physical and digital realms.

This upskilling is beyond technical capabilities as it also includes the ability to work with different people on diverse topics, tools and platforms to enable focus on the customer.

Problem solving, design thinking and communication skills are fundamental in the Industry 4.0 world.

EMPOWERING EMPLOYEES TO COLLABORATE

On the other hand, management needs to learn how to take enough risk in providing the right level of empowerment at different parts of the company to support quick, small and authentic wins for the company and its employees.

The entire delivery of customer experience must broaden and inspire the customers. Today, customers no longer settle for basic and standalone products and services.

Building organisation structures, networks, spaces and platforms to enable collaborative employees will better mobilise them to be delivering customer-focused solutions and services.

They prefer holistic, integrated and seamless end-to-end offerings, which are unique and customised to their needs.

This reminds me of a conversation I just had with my 11-year-old son.

UP-TO-DATE PROCESSES

Apparently, the first DC Comics superheroes to work together were The Flash and Green Lantern.

Companies must be able to understand their customers and their individual nuances to create this customer experience.

Collection, analysis and application of customer data needs to feed forward to creation of products and services.

Some companies including Hyatt and Starbucks already have adapted their new offerings processes to include co-creation with their customers. Some others have creatively roped in their customers to help market their offerings via both physical and digital campaigns and competitions.

Perhaps lacking in many companies is the ability to also integrate their processes and policies to ensure that the entire customer experience is aligned and working as one, rather than being impeded by more traditional and internally-focused back of the house.

These are not only limited to those which are directly related to customers but also to the employees as brand ambassadors.

And it started because they both realised that, while they were superheroes, they were not able to overcome the enemy alone.

When I asked why The Flash and Green Lantern would want to work together, he told me that it is because they found a common cause, to save children.

So, it seems that the world of comics, like real life, presents the need to have a common vision and cause so that, by working together, we bring different skillsets for the betterment of the world in which we live.

As my colleague and culture guru, Joseph Tan often says – the cause needs to be greater than the cost.

Are we prepared to pay the cost of Industry 4.0 if we are not prepared?

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How A Bad Customer Experience

TOTALLY RUINED MY HOLIDAY

BY RUBA NACKEERAN

It was my first solo trip and the idea of going to Spain for a month where I knew absolutely no one both thrilled me and caused much anxiety.

The purpose of the trip was to push myself out of my comfort zone and so I made all the necessary arrangements and checked it twice.

Days passed by and the next thing I knew, I was enjoying the summer sun and soft tunes of Spanish guitar floating in the winds of Barcelona.

I thought to myself that it couldn’t get any better than this. Well, the gods must have been having a laugh because two days later I was facing the biggest haywire of my life.

My backpack, which I checked in prior to boarding my flight from Barcelona to Ibiza, was missing.

When I landed on the tiny Balearic island an hour later, you can understand the absolute feeling of helplessness I felt at not having my belongings (which I so meticulously packed) with me.

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To cut the long story short, it took seven whole days for me to be reunited with my bag.

By then, I went from feeling lost, to being angry, to finally not giving a hoot because I still had a good three weeks of holidaying to do.

What baffled me the most out of this entire experience was the lack of support I received from the Spanish regional airline I flew with.

As soon as the conveyor belt stopped moving with no bags on it, I ran over to the customer service counter and lodged a report by giving very specific details of my luggage and repeated it twice.

When asked about my compensation I was told to call the customer careline number. I was also given the assurance that I would have my bag delivered to my hotel within the next 24 hours (hah!).

The next day I realised that I could actually track the status of my complaint via the airline’s website. As I read the description of my complaint, I became fuming mad!

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My backpack which I so specifically said was blue in colour was registered in the system as green instead. So off I ran to the airport again to give another round of specific descriptions.

By day three, I was utterly frustrated because the customer careline I was asked to call had different charge rates.

We were talking 10 euros for a 20-minute phone call, with half of which was me being put on hold which resulted in me making another round to the airport.

The best part was I learnt that my bag went off roaming to Rome!

Beyond relieved that it was finally located, I was again promised to have my bag sent to me within the day or next.

MY BACKPACK RETURNS

Fast forward eight days from the day I lost my luggage.

As I was putting my shoes on and getting ready to checkout of my hotel in Granada, I saw a bright blue backpack next to my bed which looked oddly familiar.

At first I brushed off the possibility of it being my bag because I didn’t receive any phone call, message or email from the airline.

But curiosity got the better of me and when I inspected the bag – well, what do you know, it was my prodigal bag indeed!

Now this whole fiasco could have been converted into a ‘win-win’ experience if the airline had done several things.

2. AN EFFECTIVE CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM If the airline’s luggage management system was hooked up to an effective customer relationship management (CRM) system, I wouldn’t have had to make multiple trips to the airport or spend 20 euros just to make a phone call to find out the status of my backpack.

A CRM system would have effectively captured every data about my flight (i.e. flight origin, destination, passport details) and after the initial complaint, the system would have recorded the number of times I’ve called.

But more importantly, my case would have been logged into a workflow which would have then escalated to all the relevant departments within the airline and I would have received updates every step of the way.

From notifying me that my luggage has been found to providing me the exact time of delivery and subsequently getting a compensation – all this would have been done efficiently and communicated clearly within departments.

If you don’t want to take my word on how CRM has the power to change a customer’s nightmare into an opportunity for businesses to secure life-long customers, just take a look at the statistic below.

Which aspects of business were significantly impacted by the CRM? Customer retention

47%

Customer satisfaction

47%

Sales revenue Upselling/Cross-selling

45% 39%

According to Capterra’s CRM Industry User Research Report that involved 500 business from a wide range of industries and of various sizes, CRM made a huge difference when it came to customer retention and customer satisfaction.

IN HINDSIGHT In essence, there were insights gained from this solo trip.

1. MAKING THAT EMOTIONAL CONNECTION Let’s face it; if someone treats you well, chances are you’d return the favour.

Had the airline and its staff took an effort to comfort me by providing instant compensation instead of leading me on a wild goose chase, I would have felt valued enough to continue being a loyal customer.

Making that genuine emotional connection is so vital and I personally feel that businesses aren’t establishing this because they aren’t putting themselves in the shoes of the customer.

Throughout my trip and after it, I gave such bad reviews about the airline that I as an individual had influenced three other travellers which resulted in them switching to a different airline after I recounted my tale.

Nobody wants to be at the receiving end of a bad customer service when you’re paying for the service.

Of course, without my backpack, I was able to travel light!

So, if you can travel with just your hand luggage the next time, perhaps you can save yourself the possibility of a lost checked-in luggage!

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FIVE PEOPLE

MANAGEMENT HACKS

FOR THE DIGITAL ECONOMY

BY MICHAEL E. KOSSLER

Throughout most of the 20th century, management practices were designed to maximize control over employees. From punch cards to “management by objectives,” employees were told what, when and how much they needed to do, and supervised closely. It is commonly believed that if left to their own devices, employees will do as little as possible to survive.

And so, the primary job of managers is to closely motivate and manage employees to maximize productivity.

Thanks to 24/7 connectivity and the arrival of the gig economy, today’s 21st-century workforce is more empowered than ever before in human history. By some estimates, about 40% of the workforce in the U.S. and some European countries has already shunned traditional fulltime employment in favour of free agency. These free agents, by definition, have a lot of freedom. They decide when and how much to work. They don’t need to be micro-managed because they fully understand that their rewards depend directly on how much (and how well) they produce. According to experts, the trend towards free agency is only going to accelerate in the coming years, raising a critical question for fulltime employers: How to retain and motivate traditional fulltime employees when 40% of the workforce has total freedom? To successfully address this challenge, organizations must understand and practice these five people management hacks.

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1. TO MAXIMIZE PRODUCTIVITY, SET THEM FREE Imagine working for a company that does not monitor your office hours or your work – you are free to decide when and how much you want to work; and take as much vacation as you need. No, I am not fantasizing. This is exactly what a lot of companies are already doing. Why? Because they’ve understood the first hack – setting employees free increases productivity rather than the other way around.

About 20% of workers in any group are exceptional performers, 60% are average, and 20% are low performers. Thanks to Vilfredo Pareto, we’ve also known since 1906 that 20% of the people produce 80% of results. Forcing all 100% of them to set stretch goals and hoping that they will all achieve exceptional results is an exercise in futility. If employees can choose when and how much they want to work with the explicit understanding that their rewards (and consequences) will be commensurate with their choice, they will be much happier, and the organization will be able to pay them appropriately. Organizational productivity will not suffer for two reasons: One, the top 20% will anyway produce 80% of the results, and Two, the remaining 80% will be freed to work without the stigma or pressure of non-performance and contribute with higher engagement. Whether we like it or not, the 20:60:20 distribution is a given. Why not legitimize it, and manage staff costs accordingly? It’s a win-win for all.

2. PLAY FAVORITES “Why is A paid so much higher than B, C and D,” asked an employee in a townhall meeting. “This is unfair favoritism,” he added. Here’s how the CEO responded: “A is paid more because of the quality and quantity of his results. If you want to be a favorite, join the club and we’ll pay you as much too. A’s goals and results are not a secret, neither are yours. It is that simple and transparent.”

In line with hack #1, in today’s open source transparent era, it is perfectly okay to pay/reward people disproportionately based on the empowered choices they make. Performance expectations must be made clear – this is what you need to do if you want to be in the top 20%. If you choose to operate as part of the 60% or the bottom 20%, that’s ok, but remember, your pay and rewards will vary accordingly. It is entirely up to you to decide.

Contrary to conventional practice, we strongly recommend making salary information public. In times when even the Pentagon or the U.S. elections can be hacked, what are the chances that you can keep information secret anyway? Why not make it open, and crystal clear what it takes to make minimum, average and maximum rewards?

3. DITCH THE SALARY SURVEYS

Sounds familiar? Does it really make sense? Absolutely not! Why? Because no two jobs are the same. Furthermore, benchmarking to market sounds fair, but it does not consider that a good employee becomes more and more valuable and dependable over the years, even if he is doing the same job. If market data is the only benchmark, once the employee hits the top of his salary range, you cannot pay him more unless you promote him.

In this situation, either a highly dependable employee leaves, or the Peter Principle kicks in – where members of a hierarchy are promoted until they reach the level at which they are no longer competent.

Instead of salary surveys, judgment should be used to determine pay and rewards. The only questions that matter are these: How valuable is this employee to us, and What would happen if she were to leave us?

4. TRUST THEM TO DO THE RIGHT THING When Netflix replaced their detailed travel expense policy with one sentence – Act in Netflix’ best interest – many warned that employees will behave irresponsibly; and overall travel & entertainment expenses will skyrocket. But no such thing happened. Employees responded to the trust with responsible action. They acted like owners.

In today’s age of breakneck speed, rules and policies get outdated before the ink dries on them. The days of using power and authority to drive desired behavior are over. Organizations have no choice but to shun excessive rules and build a culture of trust and freedom wherein employees are recognized and rewarded for living the values rather than following rules.

5. DEVELOP LEADERSHIP ENERGY, NOT COMPETENCIES Conventional management practice says a company must continually invest to enhance their employees’ leadership competence to maximize productivity and overall performance.

Yet, the billions spent each year on leadership development yield little to no results. Why? Because most leadership training focuses on the ‘how’ rather than the ‘why’. The most productive employees are not the ones that are trained and/or paid the most.

Those that see a larger sense of purpose in their work are the most dedicated ones. Their reward lies in knowing that their efforts are creating a better future, not just earning a salary and bonus.

These people management hacks may seem counter-intuitive at first, but many companies around the world are realizing their significance in today’s open source world and have implemented them successfully. The trick is in taking baby steps, learning from them, and continually tweaking your culture until you get it right.

Question: How do companies decide how much to pay for a particular job?

Answer: Refer to benchmark survey data of how other companies pay for similar jobs.

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The Best Way to Create Your Desired Culture: Walk the Talk!

BY R. THUN THAMRONGNAWASAWAT

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“I WON’T ALLOW IT!” KURT HERWALD, A 38-YEAR OLD FORMER WEIGHTLIFTER CEO OF STEVENS AVIATION SAID EMPHATICALLY. “THAT IS OUR SLOGAN; YOU CAN’T JUST TAKE IT. EITHER CALL OFF YOUR CAMPAIGN OR GIVE US PROPER COMPENSATION. OTHERWISE WE’LL SEE YOU IN COURT!” In 1992, Southwest Airlines ran into dispute with a small aviation service operation out of South Carolina over the use of a marketing tagline – Just Plane Smart. The Texan company has been ranked amongst the world’s Most Admired Company, owning to its exhilarating work culture and unmatched profits over its peers.

While the above quotes of Herwald could have been true in a let’ssue-everybody culture of Corporate America at the time, the CEO actually said he “didn’t believe in litigation. And besides, what’s the fun in that?”

So, when Stevens Aviation provided undisputable proofs that it had been using the slogan for years, instead of fleeing or fighting, Herb Kelleher – the colorful Chairman and CEO of Southwest— side stepped this landmark lawsuit with problem-solving skill of a first grader. “Let’s settle this like a man, shall we? I challenge you to an arm-wrestling match; winner takes the slogan” It was a litigation-free solution that the 61-year old leader accepted with spirit of a warrior.

The two companies then jointly hosted the ‘Malice in Dallas’ event at a famous pro-wrestling ring. Word got out and soon every employee on both sides knew about the big bet. They, along with faithful customers, were given a day off work to come and cheer for their respective CEO. It was a 4,500 crowd of ‘Company-Stopping Match’ on par with a Mayweather vs. Pacquiao bout.

Before the big day, Kelleher released footage of his secret training to demoralize the opponent. He did bicep curls with 2-liter Wild Turkey whiskey bottles, squatted with support from beautiful ladies, and performed sit-ups with cigarette in his mouth. Even Southwest employees shook their head and went to place their bet on Stevens’ Herwald, seeking to earn easy money.

This arm-wrestling match is one case study I often bring up when in session with executives. It is a prime example that shows how a culture is built. What Southwest wanted to have was a ‘Warrior Spirit’ – a place of work where people get things done and have fun doing it. There are no right or wrong solutions, and all ideas are welcome.

Be intuitive.

a banana – also fired. So, a brain-friendly way to get your people to do what you expect of them is simply to do those actions yourself.

2. Do it genuinely. An interesting observation of mirror neurons is that they only respond to genuine acts. We only yawn when the person in front of us genuinely yawn, but we do not imitate if it is a ‘fake’ yawn. Researchers tested this by having participants observed a same action with different intents. 1) A person lifting the mug and drinking tea or 2) A person lifting the mug an ‘pretends’ to drink tea.

Mirror neurons are only activated in the former case. So, a lesson for leaders is to be true to who you are. Do not manipulate people – the brain, and its years of evolution, can see right through it!

3. Character counts. Walking the talk only works if you do it often and do it genuinely. This means to create the desired culture you must hire the right people. In fact, a study published in hbr.org in 2015 showed that companies of leaders rated high on character generated 5x the growth of companies with leaders rated low on character.

So, pay less attention to what’s on your people’s resume and more on what’s in their heart. Change your interviewing question from “What can you do?” to “What makes you happy, sad, or angry?”. The former tests their competencies while the latter tests their character and values.

One highly sought after job prospect of Southwest recounted his interview experience with Herb Kelleher. “I came into his room and Herb was sitting at his desk. He had removed his shoes and his feet were propped up on the table. I saw these big holes in his socks and I decided this was where I wanted to work”. It was through the CEO being true to who he was that helped build the warrior culture that became an insurmountable competitive advantage for Southwest.

As for the result of their arm-wrestling competition, Kurt Herwald, being some 30 years younger, soundly beat ‘Smoking Herb’ the CEO of Southwest Airlines. The beaten executive had to donate a total of 15,000 USD to charity while the winner was to have gained the rights of the slogan. But amidst the excitement and firing mirror neurons of the crowd, something else happened.

“Listen up everyone!” Declared Herwald, smiling ear to ear. “I have much respect for Mr. Kelleher for honoring our small airline with this event. I think we are both winners today. As such, we’ve decided to let Southwest continue the use of our slogan. Let’s grow together!”

The announcement brought endless rounds of cheers from employees of both companies, and raised the already electrifying atmosphere to another level.

And what better way to demonstrate that culture than by having the CEOs solving a gigantic business dispute in an arm-wrestling dare?

Needless to say that this was a graceful end to a dispute. It saved massive costs for both companies on litigation fees and the time they would have spent in court. But perhaps the most invaluable gain was the hearts of employees captivated at the event. They now realized what it meant to be living a true culture of Southwest Airlines’ ‘Warrior Spirit’.

Leadership Insights:

Just Plane Smart, indeed.

1. Use the mirror neurons. The brain is built to imitate. Mirror neurons are a set of cells that fire when we see someone else performing an action. Dr. Giacomo Rizzolatti, an Italian Neurophysiologist and professor at the University of Parma in Italy, and his team discovered this unique property of the brain while doing studies with macaque monkeys. When the monkeys saw researchers picked up a banana, their neuronal network associated with the same action – picking up Issue 22 I November 2018 11

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