The Power of Why: A book review by Bob Morris

The Power of Why: Breaking Out in a Competitive Marketplace
Richard Weylman
New Harvest (April 2013)

Why you must keep asking “Why?” until you understand why

In his book Begin with Why, Simon Sinek asserts — and I agree — that individuals as well as organizations must have a crystal clear sense of purpose or it will be very difficult (if not impossible) for them to decide what to do and how to do it. If they have the right purpose, it will guide and inform their decisions and, meanwhile, inspire and then sustain their efforts. Sinek suggests that the Golden Circle [i.e. beginning with WHY at the center, then proceeding to determine HOW to produce WHAT] “helps us to understand why we do what we do. [It] provides compelling evidence of how much more we can
achieve if we remind ourselves to start everything we do by asking why.”

Richard Weylman fully agrees. In fact, he wrote this book to help business leaders to answer the most important “why” questions and solve the most serious problems so that they and their companies can break out in a competitive marketplace. “That’s our goal here: to elevate your business performance and presence so that you are the best and only choice for your product and services — regardless of your geographic footprint or your vertical or target markets.”

Early on, Weylman poses three important questions for his reader to consider:

1. “Why are your customers buying from you right now?”
2. “Are your customers staying with you or shopping around, and if the latter, why?”
3. “What is it about your competition’s relationship to their customers that you haven’t figured out yet? Why are they so successful?”

Having obtained preliminary answers, the reader can then take full advantage of the wealth of information, insights, and counsel that Weylman provides to help her or his organization become much more customer-centric. Only then, with a much better understanding of customer perceptions and expectations, can the organization complete the difficult process of breaking out in its marketplace, differentiating itself with a competitive advantage whose nature and extent will be determined by the nature and extent of its customer centricity.

Breakthrough initiatives require results-driven leadership. “Now let’s plunge into nitty-gritty, the best practices I’ve developed from years of consultation and experience in the field, what I call the rules of engagement for having your customers define your Unique Value Promise. There are eight “rules” and Weylman discusses each in an extended passage, Pages 42-53. They are best revealed within the narrative, in context. I also presume to suggest that you consider what Fred Reichheld characterizes as “the ultimate question,” one that can be asked of all customers to determine your organization’s Net Promoter Score (NPS). Customers who give the highest ratings would be those you ask to evaluate your organization‘s Unique Value Promise. Of equal importance, their responses will suggest which modifications of it (if any) need to be made.

These are among the dozens of other passages that caught my eye, also listed to suggest the range of Weylman’s coverage:

o The Value of Our Preliminary Answers (Pages 5-8)
o The Obvious Answer Is Not the Answer (15-17)
o How Customers React to a Unique Value Promise (30-32)
o Forward Thinking Firms That Use Unique Value Promises (33-38)
o Developing a Promise-Driven Team (63-65)
o The Importance of Well-Planned Promotion Is Obvious (77-79)
o Personalizing Your Unique Value Promise (80-82)
o Little Things That Make a Big Difference (84-92)
o Finding Out What People Really Want (105-106)
o Moving from Discovery to Disclosure (110-114)
o The Keys to Brilliant Advantage-Based Selling (116-117)
o Revisiting Fundamentals (124-132)

Also noteworthy are the four mini-case studies that Weylman includes: “The Upscale Financial Firm” that requested to remain anonymous, Kelron Logistics, The Mount Paran Church, and The Conklin Company (Pages 136-150). The “do’s and don’ts” lessons to be learned from these real-world situations — as well as those described in Chapter 3 (Pages 33-38) — are relevant to almost all other organizations, whatever their size and nature may be. Readers will also appreciate Weylman’s skillful use of various “Action Points” in Chapters 2-9 that serve as a self-diagnostic while suggesting how to apply whichever insights and recommendations are most relevant to the reader’s own needs, interests, concerns, resources, and strategic goals.

Before concluding his book, Richard Weylan reiterates that the #1 objective is “never again blend in. To sustain your breaking away from the pack in a competitive marketplace, it’s essential that you elevate your service and customer interactions so that you no longer just have satisfied clients. but delighted advocates instead,” what Ben McConnell and Jackie Huba characterize as “customer evangelists.” I’ll take them one step further and suggest that most of the companies annually ranked among the most highly regarded and best to work for are also among those annually ranked the most profitable with the greatest cap value in their respective industries. Why? Because they hire, develop, and retain “employee evangelists” who are purpose-driven.

Finding Keepers: A book review by Bob Morris

Finding Keepers: The Monster Guide to Hiring and Holding the World’s Best Employees
Steve Pogorzelski and Jesse Harriott with Doug Hardy
McGraw-Hill (2008)

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.

Carmine Gallo on “the Apple experience”: An interview by Bob Morris

Carmine Gallo is the communications coach for the world’s most admired brands. A former journalist for CNN and CBS, Gallo works directly with the world’s top business leaders to craft compelling messages, tell inspiring stories and share innovative ideas. Gallo is a popular keynote speaker and has addressed executives at Intel, Cisco, Medtronic, Hewlett Packard, SAP, Pfizer, Linked In, Chevron, and other global brands. Gallo writes bestselling books including The Innovation Secrets of Steve Jobs, the winner of an Axiom award for one of the best business books of 2011. The Presentation Secrets of Steve Jobs has become an international bestseller, translated into 14 languages. Gallo’s subsequent book, The Power of Foursquare, reveals how businesses leverage new mobile marketing tools to attract, reward and engage customers. His latest book is The Apple Experience: Secrets to Building Insanely Great Customer Loyalty, published by McGraw-Hill in 2012. He graduated from UCLA and has a master’s degree in journalism from Northwestern. Gallo lives in Pleasanton, California, with his wife and two daughters.

Here is an excerpt from my second interview of him. To read the complete interview, please click here.

*     *     *

Morris: Who are Apple’s “internal” and “external” customers? To what extent (if any) does Apple treat them differently? Please explain.

Gallo:
 
The Apple Store “internal” customer refers to Apple Store employees. “External” customers are you and me, the folks who walk into the store to buy a product. Apple likes to say the soul of the Apple experience is in its people: the internal customer who is hired, trained, motivated, and empowered to do what is right for the customer.

Morris: What are the defining characteristics of Apple’s “insanely great customer experience” both internally and externally?

Gallo:
 I believe you can understand the Apple Store experience in two words: enriching lives. Those are the first two words on the Apple Store credo card that all employees are encouraged to carry. When you “enrich lives,” magical things start to happen. You hire employees who are passionate about serving the customer. You empower employees to spend as much time with a customer as they deem necessary. You design interesting spaces and multimedia displays in the store so customers can see and touch the devices. You can create innovative programs like One to One to help customers unleash their inner genius. It all starts with the vision to enrich lives; a vision that was very important to both Steve Jobs and former Apple head of retail, Ron Johnson (now CEO of J.C. Penney).

Morris: In two of your previous books, the focus is on Steve Jobs: his innovation and presentation “secrets.” To what extent does Apple’s “insanely great customer experience” illustrate any of those secrets? Please explain.

Gallo:
 I wrote The Apple Experience because we had much more to learn from Steve Jobs. In fact, some Apple Store employees told me they had read The Presentation Secrets of Steve Jobs and applied the principles to the sales floor, the “red zone,” as its known. That made me think: If the Apple Store is creating the next generation of customer service and some employees are using my book as a guide, then I have a real opportunity to capture and perhaps even influence the next level of the customer experience!

Morris: To what extent did Disney stores provide a model for Apple stores? To what extent did Apple stores provide a model for AT&T stores?

Gallo:
 I think it was just the opposite. Believe it or not, Apple inspired Disney! An executive who had the task of reinventing and revitalizing the Disney Store asked Steve Jobs for advice. Jobs’ response: Dream bigger. No better advice has ever been given. The new Disney Store will look a lot like Apple Stores complete with immersive, multisensory experiences, open space, uncluttered, and more. AT&T was also directly inspired by the Apple Store model. For example, walk into an AT&T retail location and you will be greeted within ten feet or ten seconds of entering the store. You’ll find the same approach in the Apple Store. The first “step of service” in the Apple Store is to greet a customer with a “personalized, warm welcome.” The way someone is greeted significantly impacts that person’s perception of the brand.

Morris: What are the basic tenets of “Disney’s People Management Philosophy”? What is its relevance to the Apple organization?

Gallo:
 Disney employees deliver a consistent experience because the organization is dedicated to a 4-step approach to people management: selection, training, communication and care. The same four tenets apply to Apple and to any other organization committed to improving the customer experience. You must select people who can deliver a superior experience, train them to do so, teach them to communicate effectively with customers, and care for them so they enjoy working with the company.

Morris: What is the three-step process by which Apple hires people? Why is being “fearless” a necessary trait?

Gallo:
 This is very powerful. The Apple Store likes to hire people who (1) display grit. Grit means they can handle pressure. (2) Can deliver a Ritz-Carlton level of customer service with the proper training and (3) could have gone toe-to-toe with Steve Jobs. Let me clarify the last point. Few people could have gone toe-to-toe with Steve Jobs. But it’s a question meant to gauge whether or not the job candidate displays fearlessness. In order for an effective feedback loop to occur, a company must have employees who are not afraid of giving and receiving feedback. They must be ‘fearless.’

*     *     *

To read the complete interview, please click here.

Carmine cordially invites you to check out the resources at these websites:

http://www.appleexperiencebook.com
 
http://www.carminegallo.com

Roadmap to Revenue: A book review by Bob Morris

Roadmap to Revenue: How to Sell the Way Your Customers Want to Buy
Kristin Zhivago
Bristol & Shipley (2011)

How to determine what, when, and how prospective buyers wish to make a purchase

In a sales environment in which consumers now have much more information — and thus have much more control – during the purchase decision process than ever before, those who sell must be much more aware of what is most important to each prospective buyer. The challenge is to obtain that information. How? In this book, Kristin Zhivago offers a “system” by which to do that. This system (best explained within the book’s narrative, in context) is based on this premise: Previous and current buyers buyers will reveal to sellers what they need to know in order to increase the chances of a sale to prospective buyers. Up to a point, I agree. That is, if approached properly, many prospective buyers will also reveal what they know or think they know about their preferences. That is the core premise of Neil Rackham’s approach, “SPIN Selling.”

However, as revealed in recently published books such as Martin Lindstrom’s Buyology and then Brandwashed and in Adrian Slywotzky’s Demand, it is also true of many prospective buyers that they (a) do not know specifically what they want although claim they “will know it when they see it”, (b) often make emotional rather than rational decisions, (c) many of those decisions are made subconsciously rather than consciously, and/or (d) they can be manipulated by an environment within which sensory experiences can be a decisive factor.

All that said, Zhivago offers a cohesive, comprehensive, and cost-effective system that consists of three steps: Discover (i.e. find out what buyers want and how they want to go about buying it), Debate (i.e. resolve the differences between what buyers want versus what you offer for sale as well how they buy versus how you sell), and Deploy (i.e. document a buyer’s buying process so that you can support them every step of the way, then build an action plan). She identifies the “what” of the process involved but devotes most of her attention to explaining its “how” and “why.”

Note: In the version of this review that was first published, I questioned the appropriateness of the word “debate” and I still do, much preferring a word such as “Resolve” to suggest what the second step of the process involves. Zhivago provided a clarification that I now quote in part: “the ‘debate’ in the meeting is not at all ‘against’ the customer. On the contrary, everyone in the room is united in an effort to match their own decisions and activities to the preferences and needs revealed in the interviews and the resulting Conversation and Summary/Recommendations reports.

“The only exception to this, in my experience, is any die-hard jerk in the room who has no respect for customers and who does not have a helpful character. I avoid doing business with jerks, so this usually isn’t a problem, but every so often there may be one jerk in the room who drags down the meeting.”

Her comments prompted me to re-read the relevant passages in the book and I now defer to her clarification. Read the book and decide for yourself. Her key points, and I do agree, are to (a) know what you need to know about a buyer’s purchase preferences (even if she or he doesn’t know), (b) formulate an appropriate plan based on that information, and (c) execute the plan, committing whatever resources and taking whatever action(s) may be necessary to ensure its success.

Zhivago devotes a separate chapter to each of these strategic objectives:

o How to support a customer’s buying process
o How to support the “light scrutiny” buying process
o How to support the “medium scrutiny” buying process
o How to support the “heavy scrutiny” buying process
o How to support the “intense scrutiny” buying process
o How to keep an organization on its road to revenue

Like any other map, The “Buying Process Roadmap” defines parameters, suggests distances (e.g. information gaps), identifies options, and facilitates, indeed expedites completion of a journey. In this case, the objective (obviously) is to complete a series of sales transactions in ways and to an extent that a buyer has an on-going relationship that will result in (a) additional purchases and (b) endorsements to others within the buyer’s realm of influence. In a phrase, to become what Ben McConnell and Jackie Huba characterize as a customer “evangelist.”

More a quibble than a complaint, an Index is needed and there is no acceptable excuse for its absence. Other than that, those who share my high regard for this book are urged to check out the aforementioned books as well as Fred Reichheld’s The Ultimate Question 2: How Net Promoter Companies Thrive in a Customer-Driven World (Revised and Expanded Edition).

How to Get Off to a Fast Start in 2012

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.

Examples:

• 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?

Selective candor

9. Attack Waste: If it’s DOA, bury it.

Most expensive resource wasted: TIME

• Delays
• Duplication and Redundancy
• Repairs
• Miscommunication
• 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?”

Happy Holidays!

 

The Ultimate Question 2.0: A book review by Bob Morris

The Ultimate Question 2.0: How NET PROMOTER Companies Thrive in a Customer-Driven World
Fred Reichheld with Rob Markey
Harvard Business Review Press (2011)

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.”

How and why asking the “ultimate question” can create the ultimate competitive advantage

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

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

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.

Most Valuable Business Insights: 6-10

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.

The power of asking & answering the right questions

Among the most important and yet often neglected core competencies are (1) asking the right questions, (b) obtaining the right answers to them, and then (3) taking appropriate action.

Peter Drucker asserts that decision-makers should focus only on what is most important as opposed to what is merely urgent. All effective leaders ask the right questions and those questions tend to remain the same. Here are five from Drucker:

1. What is your mission?
2. Who is your customer?
3. What does your customer value?
4. What results are you trying to accomplish?
5. 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 out that seeking an answer to the wrong question is at least as foolish as (in his words) “doing with great efficiency what should not be done at all.”

Now consider what Fred Reichheld has to say about obtaining customer feedback. Decades of real-world experience and research convinced him that there is one measure that is more predictive of future business success than any other. He calls it the “Ultimate Question”: Would you recommend us to others?

More specifically, ask customers on a regular basis, preferably after every interaction, on a scale of one to ten, “Would you recommend us to others?” Then, whatever score you receive that is less than ten, immediately follow up by asking “What would we have to do to earn a ten from you?”

Finally, here are what I consider to be the questions that must always be asked when formulating or revising a marketing plan. The first two are relatively easy to answer. Success or failure depends almost entirely on the answer to the third:

1. Who are you?
2. What do you do?
3. Why should  I care?

Mark Thompson and Brian Tracy’s Now…Build a Great Business! A book review by Bob Morris

Now…Build a Great Business! 7 Ways to Maximize Your Profits in Any Market
Mark Thompson and Brian Tracy
AMACOM 2010)

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.