Finding “keepers” is only one step in a perilous process. Here’s what you need to know about the complete engagement cycle.
I cannot recall a prior time in U.S. business history when the competition for talent was more intense than it is now and I expect it to become even more so in months and years to come. In fact, much of the competition is now global in both nature and extent. Moreover, definitions of “keeper” vary not only from one company or industry to the next but also between and among first, second, and third world countries.
According to Steve Pogorzelski and Jesse Harriott who co-authored this book with Doug Hardy, the Monster Guide will help almost any organization (whatever its size and nature, wherever its operations may be) to recruit, hire, onboard, develop, and retain those candidate(s) who are best-qualified for the given position(s). I think this is what Pogorzelski and Harriott mean when referring to “the world’s best employees” in the book’s subtitle.
I commend them on their skillful use of several reader-friendly devices such as “My POV” guest contributions by senior-level executives, inserted wherever relevant throughout the narrative, as well as a “Review” section at the end of all chapters and boxed (what I call) “snapshots” of core concepts and core processes. For example, in Chapter 9, Hire and Hold: Retention, Pogorzelski and Harriott provide Figure 9.1 a timeframe matrix, an “Exercise” for CFOs, a mini-commentary on “Benefits That Balance Work,” another on “Seven Rules for Retention,” a multi-stage program for onboarding, “MY POV” contributed by Kevin Roberts, CEO, Saatchi & Saatchi, and then a “Review” of key points made in the chapter.
These are among the dozens of passages that caught my eye, also listed to suggest the scope of Pogorzelski and Harriott’s coverage.
o Three Forces Set the Stage: Demographics, Candidate Empowerment, and Increasing Relative Value of Talent (Pages 2-8)
o Poised Employees = Your Employees (15-18)
o Generational Perspectives (19-33)
o Who Is Most Valuable and, Monitor Your Recruiting Effectiveness (41-49)
o Analysis: Employer Brand Delivery (70-71
o The Candidate Experience (77-80)
o Customizing Your Message (83-94)
o Your Recruiting Web Site (96-99)
o Employee Referral Programs (111-116)
o The Funnel (127-136)
o Closing the Candidate (142-147)
o The Cost of Turnover (150-155)
o Employee Engagement (i.e. “with a strong attachment to the work itself”), Pages 157-159
o Onboarding (168-171)
o Next Practices: Transparency, Interactivity, Mobility, Diversity, and Flexibility (191-210)
Before concluding their brilliant explanation of how the Monster Guide can help almost any organization to hire and then retain who are — for them — “the world’s best employees,” Pogorzelski and Harriott observe, “It comes down to this: do you treat people as human beings or do you treat them as assets, as commodities? If you don’t care about people, they’ll have a hard time caring about you. But if you care about them as employees, as friends, as partners in business, and as neighbors and colleagues, they’re bound to join you and stay engaged. Respect, recognition, and engagement are the essence of finding keepers.”
Fred Reichheld has written books and articles about what he calls The Ultimate Question: “On a zero-to-ten scale, how likely is it that you would recommend us (or this product/service/brand) to a family member, friend or colleague?” With only a minor revision (replacing “us (or this product/service/brand) ” with “working here”), the question could — and should — be asked of those who comprise the given workforce. Finding “keepers” is only one step in an engagement cycle. I agree with Steve Pogorzelski and Jesse Harriott: If your people are not evangelists about being employed by you, the Keepers you find soon realize that and have no interest…nor should they.
I realize that no brief commentary such as mine can do full justice to the material provided in this volume but I hope that I have indicated why I think so highly of it. Also, I hope that those who read this commentary will gain a better understanding of their organization can recruit, hire, onboard, and then retain the talent needed to achieve its strategic objectives.
These are not head-snapping revelations. Everything that follows is simply common sense. The suggestions are provided in the spirit of Benjamin Franklin whom Walter Isaacson characterizes as “America’s first Yuppie.”
Here are ten (10) attitudes, strategies, and initiatives to consider:
1. Make sure everyone knows what the core business is.
• ServiceMaster (Its franchise companies include Merry Maids, Terminix, and TruGreen)
Drucker comment: “Your core business is training people to do what most people don’t want to do.”
• Home Depot
Co-founder Bernie Marcus comment: “When people walk in the door, they don’t want a quarter-inch drill bit, they want a quarter-inch hole.”
• State Farm (tag line for advertising): “Like a good neighbor, State Farm is there.”
2. Make sure everyone knows who the customer is…and isn’t.
Select Customers: Focus primarily on lowest cost, operational excellence, or “customer intimacy.” Ideally, maximize all three.
Profile of Ideal Customer DEFINES Your Best Prospect
3. “The Ultimate Question” using a scale of 1-10.
• Ask customers
• Ask employees
Actually Two Questions posed by Fred Reichheld:
• “On a zero-to-ten scale, how likely is it that you would recommend us (or this product/service/brand) to a family member, friend, colleague, or neighbor ?”
• If rating less than Eight, “What specifically can we do to earn a higher rating by you?”
4. “We always go the extra mile.”
Napoleon Hill’s assignment for Andrew Carnegie: “What do the world’s greatest businessmen all share in common?”
Note: Linda Kaplan Thaler and Robin KOval (co-authors of The Power of Small) suggest, “Go the extra inch.”
5. “You’ll know your people have heard your message when they begin to mimic you.” (Verne Harnish, Mastering the Rockefeller Habits)
6. Make haste slowly (e.g. master carpenters always measure twice so they only need to cut once.)
7. “What do you do?”: The 60-Second Miracle
During chance encounter: “What do you do?”
• “Most people (or companies) have problems with X. I solve them.”
• “What kinds of problems?” (Name one)
• “How do you solve that problem?” (BRIEF explanation)
Do it right and you will have a prospect or lead referral in 60 seconds of less.
8. Open the Financial Kimono.
• Other than payroll, how much doe it cost to open the doors each day?
• Average total indirect cost per employee? ROI re adding value?
9. Attack Waste: If it’s DOA, bury it.
Most expensive resource wasted: TIME
• Duplication and Redundancy
• Neglect (e.g. sluggish response)
#2 Waste: Opportunities to “shine” during a crisis
10. Help each client to become indispensable to its clients.
“How can we help you add greater value to your customers?”
Here is an open-source system whose “engine” can drive profitable growth
This is a revised and expanded second edition of a book published in 2006. In it, Fred Reichheld skillfully develops several concepts in much greater depth. In most of his previous books and articles, he focuses his primary attention on how to build and then sustain trust between and among those who share a workforce. Trust is again an important theme in this latest book because, if customers do not have trust in a company, its people, and its products and services as well as in its values, they will have little (if anything) to do with it and will certainly not recommend it to others.
The eponymous book titles refer to a question of ultimate importance: “On a zero-to-ten scale, how likely is it that you would recommend us (or this product/service/brand) to a family member, friend or colleague?” As Reichheld explains, the phrasing of that question is “a shorthand wording of a more basic question, which is, Have we treated you right, in a manner that is worthy of your loyalty?…But the question really wasn’t [and isn’t] the heart of things. After all, no company can expect to increase its growth or profitability merely by conducting surveys, however the question or questions might be phrased.”
With assistance from Markey, what Reichheld does is provide a cohesive, comprehensive, and cost-effective management system by which that has three central components: categorizing customers into one of three categories (i.e. Promoters, Passives, an Detractors) through a simply survey, creating an easy-to-understand score based on that categorization, and finally, “framing progress and success in these terms, thereby motivating everyone in the organization to take the actions required to produce more promoters and fewer detractors.” In other words, on an on-going basis, use current scores and related feedback to drive improvements.
With regard to the scores themselves, Promoters are those who provide a rating of 9 or 10, Passives 7 or 8, and detractors 6 or less. For purposes of illustration, let’s say 100 customers respond as follows: 35 Promoters, 45 Passives, and 20 Detractors. The net score is determined by subtracting the total number of Detractors (i.e. 20) from the total number of Promoters (i.e. 35) and that is 15. That is a baseline against which subsequent efforts to increase Promoters and decrease Detractors are measured. Reichheld calls it the Net Promoter Score (NPS) and so shall I.
In my opinion, with all due respect to the importance of the NPS metrics, the implications of the measurements are of far greater importance. Think of the measurements as a mirror, one that reflects multiple realities. Only by understanding those realities — and how to respond to each effectively — can appropriate change initiatives be initiated to achieve and then sustain a never-ending process of improvement. “Flexible it may be, but without the following elements, NPS just won’t work.” They are:
1. Companies must systematically categorize promoters and detractors in a continuous, timely, and accurate manner. I think it is also important to note when Promoters become Passives and when Detractors become Passives. Also, to understand why.
2. Companies must create closed-loop learning and improvement processes and build them into their daily operations. In other words, NPS is not – and must never be viewed as – a customer relations improvement initiative or even a program. It must become and then remain an organic system.
3. CEOs and other leaders must treat creating more Promoters and fewer Detractors as mission critical. I’d say “mission imperative.” As Peter Drucker once observed, “Without customers, there is no business.”
Hundreds of the world’s largest and most complex organizations have adopted NPS but I hasten to point out that it can also be of substantial value to almost any company, whatever its size and nature may be. In recent years, it has been my great pleasure as well as privilege to work closely with owner/CEOs of hundreds of companies whose annual sales are less than $20-million. I would recommend NPS to each without hesitation or qualification. As Reichheld explains, it is “a business philosophy, a system of operational practices, and a leadership commitment, not just another way to measure customer satisfaction.”
I have read and reviewed all of Fred Reichheld’s previous books and thus was especially interested in reading his latest, The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer Driven World, co-authored with a Bain colleague, Rob Markey. It is a revised and expanded edition of Reichheld’s previous book (The Ultimate Question: Driving Good Profits and True Growth) in which he examines various dimensions of loyalty while focusing on what I consider to be an especially important business issue: knowing what is most important to customers by accurately measuring the nature and extent of customers’ satisfaction. As Reichheld explains, “What this book offers…is a wholly new kind of measurement, a measurement that can focus an entire organization on improving every customer’s experience day in and day out. The process is both simple and radical. Companies need to ask just one question — the Ultimate Question — in a regular, systematic, and timely fashion.”
Here’s the question: “On a zero-to-ten scale, how likely is it that you would recommend us (or this product/service/brand) to a friend or colleague?” Reichheld then adds, “I also instructed companies to ask at least one follow-up question: ‘What is the primary reason for the score?’”
According to Reichheld, respondents can be categorized as follows: “Promoters” (a score of 9 or 10), “Passives” (7 or 8), and “Detractors” (6 or lower). He suggests that the phrasing of the ultimate question “was shorthand wording of a more basic question, which is, ‘Have we treated you right, in a manner that is worthy of your loyalty? ‘”
What we have in UQ2 is a much wider and deeper development of the original concept. In fact, the reader is provided with Net Promoter System (NPS) that produces a current and accurate measurement of the strength of an organization’s relations with customers: number of promoters minus number of detractors equals net score.
It is worth noting that several dozen of the most innovative, most highly admired companies have adopted and are now taking full advantage of the NPS system. They include American Express, Apple, GE, eBay, Facebook, Intuit, LEGO, Progressive Insurance, Southwest Airlines, and Zappos.com. Although Reichheld and Markey are convinced that this system is sufficiently flexible to serve the needs of almost any organization, whatever its size and nature may be, they assert – and I wholly agree – that NPS just won’t work without all three of these essential elements:
Although Reichheld and Markey are convinced that the NPS system is sufficiently flexible to serve the needs of almost any organization, whatever its size and nature may be, they assert – and I wholly agree – that NPS just won’t work without all three of these essential elements:
1. “Companies must systematically categorize promoters and detractors in a timely, transparent fashion.”
2. “Companies must create closed-loop learning and improvement processes and build them into their daily operations,”
3. “CEOs and other leaders must treat creating more promoters and fewer detractors as mission critical [as is the conversion of passives to promoters].”
In my opinion, this is one of the most valuable business books published, not only this year but since THQ was published in 2006.
* * *
Fred Reichheld is a Bain Fellow and founder of Bain & Company’s Loyalty Practice, which helps companies achieve results through customer and employee loyalty. He is the creator of the Net Promoter®system of management. His work in the area of customer and employee retention has quantified the link between loyalty and profits. Fred’s books, The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value (HBSP 1996); Loyalty Rules! How Today’s Leaders Build Lasting Relationships (HBSP 2001), and The Ultimate Question: Driving Good Profits and True Growth (HBSP, 2006) have all become best sellers. In his latest book, The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer Driven World (HBR Press-Sept. 2011), Fred reveals how all manner of organizations have utilized the Net Promoter System (NPS) to generate extraordinary growth and profits.
Rob Markey is a Partner at Bain & Company and leads the firm’s Customer Strategy and Marketing practice globally. He has worked with Fred Reichheld on customer and employee loyalty for more than 20 years, supporting Bain clients all over the world on their journeys toward customer and employee advocacy. Rob has published articles on customer and employee loyalty in the Harvard Business Review and many other business publications. He is an active practitioner, and speaks regularly on the topic. He also contributes to a blog, which can be found at http://www.netpromotersystem.com. Raised in the suburbs of Cleveland, Ohio, Rob graduated with a degree in economics from Brown University. He received an MBA from Harvard Business School. He joined Bain & Company in 1990. He was one of the founders and served on the Board of “City Year New York,” and remains active in the youth service movement.
I urge you to check out the resources at this website.
After having read and reviewed so many business books, I now share brief comments about what I consider to be the 25 most valuable business insights and the books in which they are either introduced or (one man’s opinion) best explained. Here are second five:
6. Customer Evangelism: Satisfaction is determined per transaction; loyalty is determined by sustainable satisfaction; zealotry occurs only when customers say “Yes!” to this question posed by Fred Reicheld: “Would you strongly recommend us to a friend, neighbor, or colleague?”
Best Sources: Fred Reichheld’s The Ultimate Question: Driving Good Profits and True Growth and Creating Customer Evangelists: How Loyal Customers Become a Volunteer Sales Force co-authored by Ben McConnell and Jackie Huba.
7. EDNA: This is an acronym I devised long ago when I began to teach English at Kent School in Connecticut.
Exposition (i.e. expose, reveal, open up, reveal) explains with information.
Description makes vivid with compelling images.
Narration explains a sequence and/or tells a story
Argumentation convinces with logic and/or evidence
Effective communication relies on mastery of one or more of these four.
Best Sources: Robert B. Cialdini’s Influence: Science and Practice (5th Edition) and Crucial Conversations: Tools for Talking When Stakes Are High co-authored by Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler
8. Employee Engagement: Recent research indicates that, on average, less than 30% of a workforce in the U.S. is actively and positively engaged. The others are either passively engaged (i.e. mailing it in) or actively disengaged (subversive and toxic). Increase active and positive engagement by (a) convincing workers that they and what they do are appreciated, (b) making crystal clear what expectations of them are and how their performance will be measured, (c) earning and sustaining their trust and respect by setting an with what you say (both verbally and non-verbally) and with what you do.
Best Sources: Freedom, Inc.: Free Your Employees and Let Them Lead Your Business to Higher Productivity, Profits, and Growth co-authored by Brian M. Carney and Isaac Getz, Simon Sinek’s Start with Why: How Great Leaders Inspire Everyone to Take Action, Edward M. Hallowell’s Shine: Using Brain Science to Get the Best from Your People, and The Why of Work: How Great Leaders Build Abundant Organizations That Win co-authored by Dave Ulrich and Wendy Ulrich.
9. Innovation: In essence, innovation achieves improvement of what already exists and that could include almost anything (e.g. an idea, assumption, theory and strategy as well as a product, process, or behavior). Almost anything can be improved and almost anyone can do that by embracing that challenge and pursuing that opportunity.
Best Sources: Tom Kelley’s The Idea of Innovation and The Ten Faces of Innovation (both co-authored with Jonathan Littman) as well as Steve Johnson’s Where Good Ideas Come From: The Natural History of Innovation and Henry Chesbrough’s Open Innovation: The New Imperative for Creating and Profiting from Technology
10. Lean: The concept of “less is more” can be dated back at least to ancient Greece. In a business context, its core concept is elimination of whatever is wasteful such as a production process that consumes too much time and effort as well as raw materials, one that results in omissions, duplications, redundancies, and flaws. Albert Einstein probably said it best: “Make everything as simple as possible…but no simpler.”
Best Sources: James Womack’s Lean Thinking: Banish Waste and Create Wealth in Your Corporation, Revised and Updated and Lean Solutions: How Companies and Customers Can Create Value and Wealth Together, both co-authored with Daniel T. Jones
Note: You may also wish to check out Most Valuable Business Insights: 1-5.
Mark Thompson and Brian Tracy focus almost entirely on the most important “what” and the most effective “how” with regard to “building” both a great business and a great career in business, doing so one step at a time. There are no head-snapping revelations among the seven “ways” to which the book’s subtitle refers, nor do Thompson and Tracy make any such claim. It is important to remember Thomas Edison’s observation, “Vision without execution is hallucination.” A separate chapter is devoted to each of the seven, explaining HOW to
• Become a great leader
• Develop a great business plan
• Surround yourself with great people
• Offer a great product or service
• Design a great marketing plan
• Perfect a great sales force
• Create a great customer experience
With all due respect to becoming “great” and achieving “greatness,” there is much to be said for the value of information, insights, and advice that will help business leaders and their companies to become better. In fact, as the Japanese word kaizen correctly suggests, improvement is a process, not a destination, and should be continuous.
Granted, all of the exemplars cited are huge global corporations but the lessons to be learned from them are relevant to any organization, whatever its size and nature may be. For example, Cuadra Boots in central Mexico that Thompson and Tracy include among exemplars because of “four essential lessons in product quality and innovation” that the Cuadra brothers and others have had to learn before mega-success [a relative term, to be sure] was possible.” They are:
1. Don’t follow the leader.
2. Create exclusivity.
3. Keep in continuous customer contact.
4. Testing takes you from good to great (or at least to better)
Thompson and Tracy make excellent use of questions throughout their narrative, offering a “checklist” at the conclusion of most chapters that challenges their reader to think about what must be done and how to get it done. They also include excellent questions posed by others, such as Peter Drucker (Pages 49-5) and Fred Reichheld (Pages 108-110) that also focus on what is most important as opposed to what is merely urgent. All effective leaders ask the right questions and they tend to remain the same. Here are five from Drucker: What is your mission? Who is your customer? What does your customer value? What results are you trying to accomplish? What is your plan?
It is easy to ask such questions but sometimes very difficult to know what the right questions to ask are. Drucker would be the first to point that seeking an answer to the wrong question is at least as foolish as “doing with great efficiency what should not be done at all.” Thompson and Tracy help the business leaders who read this book to ask the right questions and then, better yet, they help them to obtain the right answers and understand how to respond effectively to them.