Customer delight is the new black. Every now and then you get a business book that hits the spot. One that makes you think and puts things into a different context. With some compelling and well thought through concepts on how to improve your business. “The connected company” is one of these books.
What is the context?
There is a great “reset” happening. We have a system problem. 80% of our economy is service based. However, if you look at how we organise our businesses, most of them are based on manufacturing principles:
- With pre-defined inputs and outputs
- With a one way flow
- Completely predictable
Is your company designed to deliver customer delight?
The problem is that services by their nature need a very different approach. Delivering services is an interactive process. Dealing with unpredictable clients, having unreasonable demands. With rising expectations. In an interdependent, complex ecosystem. The question you need to ask is; is your company designed to deliver customer delight?
Less than 1 and 10 companies are exceeding expectations. Service companies are the most hated companies in the world. 3 out of every 4 clients don’t trust you. How many companies you deal with, do you love? You can probably only mention one or two. That is an indictment to all of us.
You are in a red queen race
On top of the service revolution, businesses are dealing with the increasing pace of change. The red queen race. You need to run at your fastest to stay at the same place. To move forward, you need to run faster than the fastest. We have reached a complexity tipping point. Your optimisation peaks don’t work anymore. You are climbing the wrong peak. In fact, the mountains have become waves.
Your own organisation
You need to have a hard look at your own organisation.
- How close are you to your customers?
- Do you treat your staff as idiots? (Idiots can’t solve problems).
- How eccentric are your activities at the margin? How strong are your shared values and culture?
- How decentralised are you?
- How adaptable are you?
- Do you make a good profit or bad profit?
- Is your organisational structure linear?
Net promoter score
If you want a hard metric here is one; what is your Net Promoter Score? On a scale between 1 and 10, how many of your customers would they recommend you to others? The Net Promoter Score correlates strongest of all indicators with sales and profits.
Let a 1000 flowers bloom
In a fast-changing customer-centric world you need a different type of organisation. You need to create a flexible, adaptive system that can self-organise around the clients. Here is how it can be done:
- Base it on a system of small autonomous units (pods). Research has shown that pods are 30-50% more efficient.
- Organise like networks rather than as a chain (a chain can break).
- Make it part of a community of purpose, with strong shared values and culture
- Allow staff to operate on guiding principles.
- Pace layer your organisation (some part of your business need to change quicker than others. A version of the value chain of Porter based on pace of change)
- With an emphasis on connectivity and proximity (in effect building a city of purpose, a business can learn a lot from how cities are organised)
- Treat staff as players, not as employees
- Focus on natural learning growth through reproduction and evolution (“Let a 1000 flowers bloom”)
It has been done.
More and more companies are doing it. And not just by the smaller companies (there is no doubt that this approach is an opportunity for small business). Nordstrom, Amazon, Valve, Second Life, Morning Star, Semco, Whole foods, etc. Self-organised, pod-based, strong culture, completely trusting people.
Nordstrom’s employee handbook consists of one paragraph
WELCOME TO NORDSTROM. We’re glad to have you with our Company. Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them. Nordstrom rules: Rule #1: Use your good judgment in all situations. There will be no additional rules. Please feel free to ask your department manager, store manager, or division general manager any question at any time
Ants and bees have been organised like this and survived for the last few billions of years. This is business Darwinism. Adapt or die.
What can you do?
Split the companies into the smallest parts possible. Apply the two-pizza rule (if you can’t feed the team with two pizzas your team is too big). Study ants and cities. Remove all bureaucracy. Re-examine your purpose and passion. Create happiness. Become self-organising. Start small, begin with a pilot pod outside of the organisation. Let go.