Is your company unintentionally creating executive blind spots?
One of the nice things about being a very senior executive with a multinational company is that the job comes with perks. Sometimes, however, these perks can have the unintended effect of isolating key decision-makers from the very information they need most.
Example: For decades, the top executives at America’s leading automobile manufacturers always drove the latest models—washed, maintained, and looked after by in-company employees. How on earth could they possibly know about quality, maintenance, service or other issues faced by ordinary customers when they never encounter them?
Example: One of our telecommunications manufacturing clients used to routinely give the latest handsets and toys to its key executives. As a result, these folks never had to go into a phone store, never had to deal with inefficient or even hostile distributors, and never had to compare their offerings with competing products. It was only when the company radically changed this policy and forced its folks to go directly through the same channels customers had to use that they realized that their once-unassailable advantages with customers were starting to erode.
Example: A mobile telecommunications operator routinely had its operations staff make sure that the cellular signals in the headquarters office and even key residential areas inhabited by senior executives were strong, reliable and consistent. Imagine the surprise these executives felt when friends and relations expressed their infuriation with spotty coverage, dropped calls or weak signals—after all, this never happened to them!
The message? Sometimes, buffering senior people from exposure to ordinary experiences unintentionally gives them a false sense of security with respect to the quality, reliability or convenience of your offerings. This in turn can breed dangerous complacency and a lack of urgency with respect to underlying problems. In best-practice companies, in contrast, there are mechanisms to make sure that direct contact with customers is a part of every executives’ normal job. At Amazon.com, for instance, executives routinely spend time on the phones with customers. At Ikea, a few times a year executives and line-level staff work together. At Continental and Southwest airlines, it would not be unusual for executives to spend time at the ticket counter or handling baggage. We’ve found that there is no substitute for first-hand experience when it comes to creating the impetus for improvement.
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- Posted Rita McGrath on November 28, 2007
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Consumption Chain - customers value a complete experience, but companies organize otherwise
A short recent piece in Fast Company highlights a point that I make over and over again in our executive programs and with clients: customers value a complete experience, while companies organize themselves by a different logic, often one that has to do with efficiencies. The article (September, 2007 edition, page 27) features a senior leader at GE trying to sell to the Olympic organizing committee of the Beijing Olympics. Here’s the stunning revelation they discovered:
“We have always geen good at winning customers in a specific space - for example, our energy experts can sell to energy folks. But when governments spend billions of dollars on Olympic projects, they don’t want to be sliced and diced by the same company. Our number-one revelation is that customers don’t necessarily organize their buying behavior the way we structure our business.”
To learn more about how to create complete customer experiences, you can read Chapter 4 in McGrath and MacMillan The Entrepreneurial Mindset (Harvard Business School Press, 2000). To see how the technique can be used to drive growth opportunities, see chapter 2 in MarketBusters: 40 Strategic Moves that Drie Exceptional Business Growth (Harvard Business School Press, 2005).
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- Posted Rita McGrath on November 19, 2007
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