A business that has satisfied staff usually has satisfied customers. Funny that. LOUIS COUTTS
By Louis Coutts
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Teaching is the most phenomenal way to learn. Two important things happen to me when I am teaching.
The first is that in preparing a presentation I am constantly reminded about how much I have forgotten. The second is that when I get into a program I am reminded by the participants of how much I don’t know. It’s scary.
However, what these experiences do is to drive me to revisit those issues I have forgotten and to think hard and long and undertake research when I am made aware of what I don’t know.
I came across a slide the other day that contains some information provided to me when I did a program in Singapore quite a few years ago. I can’t recall who did the research, but it was given to me by a guy from the economics department of Melbourne University. It is the summary of research as to why customers defect. Basically, this is the story.
- 2% die.
- 4% for other reasons.
- 5% have friends who are competitors.
- 9% move to another area.
- 12% are dissatisfied with the product or service.
- 68% leave because they believed that the business didn’t care about them.
Some years later I was undertaking a program at UCLA and the professor running the program came up with some research undertaken in relation to staff involvement in organisational success.
This research indicated quite clearly the exponential increase in profitability per person the longer that person remained with the company. He then came up with another study that indicated that 70% of employees who voluntary left an organisation did so because they believed that the company didn’t care about them!
At first, I found this correlation extraordinary, but on reflection of course, it makes a lot of sense. This is where I realised how much I have forgotten (and how much more I don’t know). When we realise that the profitability of a company increases with the longevity of employment and that both employees and customers leave companies because they feel that the company doesn’t care about them, it is obvious that if you care about your employees, it is more than likely that you will care about your customers.
However, it is unlikely that any organisation will be able to suddenly turn around and say “we care about our employees and our customers”. There has to be some guiding influence in the organisation that ensures that this happens automatically, without thinking.
The way to ensure this happy coincidence of events is to develop a culture where everyone instinctively assumes the values of the organisation.
It is one thing to say that you care about a customer when in the same breath you ignore a customer complaint or treat it with circumspection or contempt. It is one thing to say you care about your employees when an employee comes to management with a concern and it is ignored or treated with contempt.
The 1986 Challenger space shuttle catastrophe occurred for that very reason. The employee who raised the concern was made to feel a leper, trying to jeopardise the most significant shuttle flight in its history (the President and the lay person school teacher on board the shuttle were going to conduct an education program from the shuttle for that teacher’s class).
When a business develops a track record of ignoring what customers or employees have to say, both the customer and the employee realise that there is no point saying anything, with the result that important data, often critical to the growth and sometimes the survival of the company, never reaches anyone’s ears.
Customers vote with their feet as do employees. Alternatively, employees simply say “if that is the way you want it done well that’s the way I will do it”, even though they realise that the outcome is likely to be bad.
Developing a culture of listening and then responding to what you hear is a function of leadership and it requires a certain humility that unfortunately is not in the tool kit of many managers. What we know is that when a culture of listening and responding to what management hears becomes embedded in an organisation, respect for leadership increases and a true leader can then lead with the authority conferred upon her or him by their followers.
So, if you lose a customer or an employee, or you are simply not growing as fast as you think you should, perhaps you can ask yourself the question “am I listening?” The answer will be determined by the number of times you have acted on feedback from customers or employees.
Make next week a listening week, and the following week an “act on what you have heard” week.
Louis Coutts left law and became a successful entrepreneur. His blog examines the mistakes, follies and strokes of genius that create bigger, better businesses. Click here to find out more.
To read more Louis Coutts blogs, click here .