MANAGEMENT SPECIAL..... Don’t Poke the Customer:

Don’t Poke the Customer:
Why Companies Need to Empower Employees and Get Connected
 

Stodgy companies likely reminisce for the days when information was limited and customer complaints were muted. But the Internet — that pesky thing that just won’t go away — pulled off quite the trick by connecting consumers and amplifying individual voices. A single person now has the tools to get around an organization’s hierarchy. Or, if you make them angry, a customer can use those same tools to ignite and gather widespread dissent.

All of this means that companies face a tough but clear dilemma: Either get connected and give customers real value or fade away.

Dave Gray (@davegray), author of The Connected Company, believes a rebooted organizational model is the key to adaptation in this networked environment. In the following interview, Gray discusses the elements of a connected company — a system that works with empowered consumers instead of against them. He also explores the evolving relationships between customers and companies, companies and employees, and employees and their work.

What is a connected company?

Dave Gray: There are things that have worked very well in business for the last 100 years. They’ve worked so well, in fact, that we’ve come to assume that that’s the only way to do it. I call this “design by division.”

Companies that use this method are divided companies. They run on the idea that dividing the labor lets a company be more efficient because people can become adept at the specialized elements of tasks. That works well for certain kinds of work, particularly industrial work. But what happens when the work becomes more purpose-driven and more complex in the details? When your work is highly variable and you need creativity at various points along the job, it’s much more important for people to be connected to the high-level purpose of the work.

That’s where a connected company comes in. A connected company is one where the work is approached holistically. It’s a place where people are connected to the purpose of the work and they’re connected to each other in a way that allows them to own whole chunks of work. By that, I mean in many cases owning a customer’s experience instead of a task.

Related to customer experiences: A company might believe its online support and automated phone line are customer services, but when I’m forced to use them they feel like obstacles. It seems like there’s a significant difference of opinion there.

Dave Gray: It’s not only a difference of opinion, it’s a difference of priority. That’s exactly the kind of thing that I’m referring to when I talk about a divided company.

That company has tried to decide in advance what all of the problems are that people might have. They’ve built this voice-prompting hell and they think they’re going to quickly route the customer to someone who can solve his or her problem.

They’re optimizing. They’re looking at all of their costs and they’re including customer service as a cost. But your cost, your time and effort is external to the system that they’re measuring. Now, that’s not only a cost to you, that’s definitely a cost to them in terms of customer loyalty and customer satisfaction. They might measure those things elsewhere, but they’re not looking at it as a financial cost in their system. In fact, most companies have no way to measure the cost or the value of a happy customer.

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What does it look like when a company offers a legitimate customer service?
Dave Gray: Here’s an example: Vanguard is designed specifically so the people who take customer service calls own the customer and the problem. If a customer service representative, for whatever reason, cannot solve your problem or answer your question, they don’t hand you off to another person. They bring another person into the call and they stay with you.
Vanguard has a method they call “Swiss Army,” where every single employee, including the CEO, takes customer service calls. The company also ensures that phone calls are not answered by a system, but by a real human being every time.
There are arguments to be made about the efficiency of this method, but a lot of companies don’t actually measure a problem end-to-end. A customer might end up calling, going to the website, and tapping into the system three or four or five times to solve a single problem. Sometimes the problem doesn’t get solved and the customer gives up in disgust and frustration. Those experiences often aren’t captured by these so-called efficient systems. So what’s really more efficient, a system that bounces the customer between people and resources, or one person answering the phone and solving your problem?
Vanguard as a company realizes that when it comes to customer service there is no standard problem. Everything’s going to be an exception in one way or another. The best way to resolve issues is to let an employee use their whole brain and let them own the customer’s problem.
Is a connected company primarily focused on customer relationships?
Dave Gray: In my mind, the difference between a divided company and a connected company is that a divided company is focused on its internal efficiency and a connected company is focused outside on its customers.
How does a divided company become a connected company?
Dave Gray: That’s a really difficult question, and that’s one of the reasons that I had to write a whole book about it.
I believe that current structures prevent companies from making that switch. We’ve reached a tipping point where a fundamental rethinking of the structure of companies is needed.
What a lot of companies are doing now is “network weaving.” They’re starting to put Facebook-like things within their big organizations. If you’re a salesperson in Bangladesh with a problem it’s probably easier now than it was in the past to find the co-worker in Germany who can address your issue.
However, network weaving doesn’t change the incentive structures, nor does it change the way work is organized or the way that work is done. Most organizations are still designed in a hierarchical fashion with the CEO at the top with divisions and people responsible for tasks, jobs and micro jobs rolling down from the top of the pyramid. That divides up the labor and it has a tendency to disconnect people from the work.

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The alternative to that is something I call “podular design.” Under this model, the company is divided more like a fractal. So when a customer calls an employee, the employee is responsible for the customer’s entire problem, not just a part of it. As far as the customer is concerned, the employee represents the whole company. That employee is a fractal of the CEO. They have the authority, the autonomy, the trust and the expectation that when they talk to the customer, they’re going to solve the customer’s problem.
That means the CEO has to delegate almost all of his or her power and authority to that employee. And you find in many of these connected companies that every single employee in the company is considered an insider because of the level of information and authority they have. That requires huge amounts of trust and transparency.
What are the downsides of a connected company?
Dave Gray: A connected company is not a panacea. It’s an approach that’s designed for connections instead of designed by divisions, and there are lots of connected things that can be problematic. For example, connected company employees are linked to a company’s purpose, but it’s still possible for that overall purpose to be misguided. Enron was an example of a connected company where the purpose was predatory.
So a connected company with good intent is fine, but those same attributes could be applied to something that’s not so benevolent.
Dave Gray: That’s right. And we can look through history and see that governments and companies that are not focused on helping citizens and customers be prosperous are doomed to fail anyway. Dictatorships usually last only during the life of the dictator. For companies, it’s the same thing. If you’re not doing something that customers are happy about, they’re not going to pay for it in the long run.
Do you feel the combination of the Internet, empowered customers and the changing nature of work is creating an inevitability to this shift ?
Dave Gray: I do believe it’s inevitable. I believe that this is, for lack of a better phrase, the organizational paradigm for the next century. Giving socially-networked and information-aware customers the things that they will increasingly demand is something that the multi-divisional corporation is not designed to deliver.

O'Reilly Media, Contributor

By Mac Slocum

http://www.forbes.com/sites/oreillymedia/2012/09/12/connected-company/