Bernard Rosauer spent about 20 years working in commercial insurance, so he’s watched a lot of companies fail. He’s concluded that the biggest cause of failure is delivering a poor customer experience. And that is often the result of a dysfunctional business culture.
Thousands of books have been written on how companies should be doing things differently, but he wanted to make it easier. So he wrote a paper called the Three Bell Curves: Business Culture Decoded.
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Ask These 3 Questions
He says there are three main questions to consider:
1. Who does things around here?
Answer: “The Employees”
2. What things gets done around here?
Answer: “The Work”
3. Why are we doing things around here?
Answer: “The Customers”
For each, there are the extremes (negative employees, wasteful work, and unprofitable customers at one end and stellar employees, productive work, and customers who love you at the other). There’s also the huge middle ground; the bump on the curve.
The goal, he says, is to shift more of the middle over to the right of each curve.
Sounds easy, but implementing it is not at all simple! Especially because the three curves all interact with each other.
The 3 P Profit Formula
I was struck by his approach because it is similar to what I’ve been calling the “3 P Profit Formula”:
Promise (the “why”) + Process (the “work”) + People (the “who”) = Profits
My people category is broader than just the employees, it also includes all other stakeholders. Even if we have a great promise, efficient internal processes and fantastic staff, we can be undone by something like poor suppliers.
That’s why you have to constantly re-examine your processes and people: to catch problems before they prevent you from delivering on your promise. Or, as Bernard puts it, you have to keep trying to move your 3 bell curves to the right.
Whether you think of the 3 Ps or the 3 Bell Curves, the concepts are not complex, and yet so few companies manage them well. Clearly implementation is not simple.
Metrics That Help Measure Progress
But you can start the process, and monitor your progress, by looking at a few simple numbers:
1. Employee Satisfaction
You can measure this by looking at metrics such as self-reported satisfaction levels, but also through indirect measures such as turnover rates, and absenteeism. (Motivated employees will drag themselves to work even when they don’t feel great, but on those not-great days unhappy employees will call in sick.)
2. Process Efficiency & Effectiveness
This is a little harder to measure, because you may, for instance, have a low defect rate (something that is important), but at the expense of timeliness (also important). Or you may be very efficient at a particular process but if that process doesn’t add any value to the end customer, it is making you less effective and less profitable.
So overall profitability is one way to get some idea of how efficient and effective your organization is being, but it is a muddy one, because it is also influenced by other factors (like employee satisfaction and changing market conditions).
Another way to measure is to do a “customer journey map”. Eliminating steps in the customer journey can help improve efficiency and effectiveness. If getting my problem solved only takes a quick email I’m a lot happier than if I have to go back and forth several times, or speak to more and more senior customer service reps.
One way to start is to have each area within your organization look in detail at all the processes that affect their work. For each one, is it adding enough value to justify its existence? Does it add value to the customer and/or is it legally required? If not, once you’ve verified that it isn’t crucial to some other part of the organization, scrap it. So measuring how many processes you can eliminate this way helps.
You can also measure things like speed. How long does it take from the time a customer places an order until the product is shipped? How long does it take to manufacture your products? How quickly do phone calls get answered?
Be careful, though, because speed measurements can sometimes lead you astray. Many customer service departments measure and reward staff for getting customers off the phone quickly, but if that leaves the customer dissatisfied, you haven’t helped yourself.
(For a good laugh, check out this episode of CBC’s This Is That show, where they profile Canada’s top telemarketer . If you aren’t familiar with the show, it sounds like real news stories, but they are actually spoofs.)
3. Customer Satisfaction
The most commonly used measurement for this is the Net Promoter Score. You survey your customers on how likely they would be to recommend your company to a friend or colleague. Those who score 6 or lower on a 10 point scale are detractors. Those who score 9 or 10 are promoters. Subtract the number of detractors from the number of promoters to get your NPS.
While obviously you want to grow your number of promoters, Rosauer’s 3 Bell Curves paper notes that you will also improve your NPS by gently getting rid of customers who are not happy with you. (The left side of the bell curve.)
Get a Baseline
My trainer keeps all the old worksheets from every workout routine he’s had me do. When I feel like I’m not making any progress, he pulls out a sheet from a few months ago, and reminds me of how little I was able to lift or how few sit-ups I could do then. It makes me realize that even though I’m still far from rock-hard abs, I am moving in the right direction.
The same concept applies to business. If you want to improve your organization’s customer experience, start by measuring where you are now. Having baseline data to compare to will help keep you and your colleagues motivated during what is likely to be a challenging (but worthwhile) process.
(This podcast was originally aired October 31, 2014, as part of the Frank Online Marketing Show)