Monday, November 26, 2012

What Really Motivates Staff!

 “There are two levers for moving men -- interest and fear.”
~Napoleon Bonaparte

Finding out what motivates staff is more of an art than a science. So many people believe that money is the proper incentive for all workers, but that just is not always the case.

I have seen so many employees who are simply not motivated by money. They just do not value it enough to alter their behavior. Time off, on the other hand, may hold greater value for some – especially Gen Y staff. Bottom line is incentives have to be structured so they relate to the things your staff values.

One manager had been looking for an incentive to motivate one of his employees. He had tried everything to no avail and had become very frustrated. Finally out of desperation, he got her a $500 gift certificate to an upscale women’s apparel shop. This worked and actually ended up being a whole lot less expensive than the other incentives he had tried, but it was successful because he was able to customize the incentive to this staff member’s wants.

On the other end of the spectrum from incentives and rewards is loss aversion. The theory here is that the hurt associated with a loss is much more motivating than the satisfaction of a gain. To use myself as an example, I have been to Las Vegas many times, but I never gamble because the idea of losing money is so much more repugnant to me than a financial windfall is appealing.

Using teachers in Chicago, three researchers did a neat experiment to test this theory and how it might relate to performance. Participants were randomly selected and divided into two groups. Both groups were given a set of performance goals for the year, and their success would be measured at the end of the year.

The first group was immediately given a $4,000 incentive and told that they would have to pay back a portion for every goal that was unmet at the end of the year. For the second group, they set up a bonus system that would pay each teacher up to $8,000 for meeting their goals. In the first case, the reward was given up front, but with the second group, the incentive – though not paid until the end of the year – could potentially be double that of the first group.

Results showed that grades were as much as 10 percent higher among students whose teachers were members of the first group – the loss group – than they were for students whose teachers were in the second group. In this example, applying the loss aversion theory really seemed to work.

So if loss aversion is so successful, why is it not used more in business? I think this is due to a couple of reasons. First, many managers and owners are just not familiar with this behavioral theory, and second, many employers feel uncomfortable about taking money away from their employees. A more palatable alternative might be to take the money back from future incentives.

While many employees relate to a monetary incentive, many just do not. To be successful, an incentive program needs to be tailored to the individual employee, and there are many potential ways to motivate – including loss aversion. You just have to find what works for your staff.

Now go out and make sure that you have the right incentives in place to excite and motivate your staff.

You can do this!

Friday, November 16, 2012

How to Achieve Great Customer Service

Be everywhere, do everything, and never fail to astonish the customer.
-Macy's Motto

I am often asked how you achieve great customer service in a business. This is a fair question, because though customer satisfaction surveys and mystery shoppers provide very effective ways of measuring the success of the existing customer experience, they do not tell us how to create great customer service in the first place.

Providing great customer service is not as simple as saying “exceed customer expectations.” Rather, it involves a series of interactions from the moment the customer first encounters your business until the time he or she leaves.

Too often businesses define the success of their customer service based on the experience created by only one person in the business, ignoring all other interactions. For instance, medical doctors frequently think they give excellent patient service but completely forget about all the other touch points from the front office staff to the billing department.

For another example, I frequently see businesses provide a great sales experience only to fail on the last impression (e.g. late delivery) and destroy all the good they created in the earlier stages of the interaction. 

I advise each business I work with to define all of their customer touch points from the first point of contact until the service event is complete. These can include a customer’s phone call, the condition of your restrooms, the cleanliness of your windows, the way you welcome a returning customer and the list goes on. Obviously, there can be many of these touch points and they each must be considered carefully.

For example, consider the interaction between a clerk and a customer. Looking at the overall experience is not nearly enough. Rather, you need to break it down and go through each part of the transaction, evaluating how effective it was.  How did the clerk communicate with the customer? How friendly were they? If it was a returning customer, how quickly did the clerk recognize them? Did the clerk have a smile on his or her face? Did they use the customer’s name and make them feel as though they were the most important person?

This list of questions could go on and on and vary based on the position, but the point I am trying to make is that customer service must be thought of as a series of interrelated processes. Great customer service is achieved by ensuring that each of these points is identified and measured for success.

Now go out and make sure that you identify each customer touch point and establish a plan of evaluating the service you provide at every one.

You can do this!

Monday, November 5, 2012

Succession Planning

If you want one year of prosperity, grow grain. If you want 10 years of prosperity, grow trees. If you want 100 years of prosperity, grow people.

~Chinese Proverb

Every business should have succession plans for its key personnel as part of its overall strategic plan. It is critical to identify personnel vulnerabilities and determine how you might overcome them.  It is so easy to ignore these issues, but doing so puts the firm in a very precarious position.

I was helping a firm that had lost a key executive to an unexpected illness. When I was called in, the firm was reeling from the loss of this very well-liked executive. In addition to the staff’s grief, the business was in dire straights as they had been unable to find a replacement. Without someone to take over, the executive’s work fell to his staff who lacked the necessary experience. As a result, the profitability of firm fell dramatically. Had this firm had a succession plan in place, they would have been in a much better position.

Succession planning must address the loss of key staff members both in the event they pass away suddenly or become significantly incapacitated and in the event they simply retire. The difference between these two situations, of course, is how much time you have to find a replacement.

There are two general ways a business can work through the unexpected loss of key personnel. One way would be to ensure that the remaining staff is able to pick up the slack. That way, the business can keep moving forward until a replacement is found either by promotion or a new hire. A second alternative would be to hire someone who can come in and fill the role on a temporary basis. There are many firms out there that specialize in locating temporary CEOs or CFOs.

When planning for the retirement of a key executive, you can take one of two approaches. Firstly, you can groom a successor in advance so they are ready to step in once the executive steps down. This plan should involve providing any requisite training and experience.

If the firm is small, however, providing the necessary training may be cost prohibitive. In the event grooming an internal candidate is not a feasible option, the business can hire a replacement in advance of the retirement, which would allow the successor an opportunity to work alongside the executive, thereby helping ensure a smooth transition. Of course, as with all hiring decisions, a significant amount of time and money should be invested in finding the right person for the key position.

Now go out and make sure you have succession plans in place for your key personnel. It is important to be prepared to take action in the event of loss through retirement or an unanticipated event.

You can do this.