Building blocks in drafting a winning strategy

 I have been moving to a new house and this process has opened up a Pandora’s box of customer experiences with very different kinds of companies.

This has come down to choosing electricity providers, trying to get the roof fixed, internet connected, you name it.

The beauty of moving houses is that it really provides a goldmine for anyone interested in researching how companies treat customers and how they have built strategy as part of their business model.

In this post, I’ll draw on my interactions with several service providers in discussing how a company can succeed or fail in overall strategy and its implementation.

But don’t worry, this won’t be just a mere rant from a frustrated customer.

I’ll also draw on the latest book that I am reading: “Playing to Win: How strategy really works” published by Harvard Review Press.

The book is written by A.G. Lafley and Roger L. Martin, both who have immense experience from Procter & Gamble in the area of strategy in particular.

Procter & Gamble owns a variety of key brands that most of us use every day (Head and Shoulders, Tide) and they have had to make hard and strategic decisions in how to grow the company and interact in the marketplace.

 

Playing to win  

Anyone who has ever contemplated on how to develop and then built strategies knows that although it is not an easy task, it can be done.

Yet, many people profoundly misunderstand what strategy is.

Vision, for example, is not strategy but a crucial but only a part of strategy.

The main message from this book is that strategy does just not “happen”.

Crafting a winning strategy is about 5 very specific and interconnected factors:

  1. Determining the winning aspiration.
  2. Choosing where to play.
  3. How to win in that playing field.
  4. Identifying the capabilities that you need to win.
  5. Developing the management systems that support these choices.

Sounds easy, and yet so many companies make wrong choices either in the top management or at the operational scale e.g. how the staff translates these to everyday practice.

At Procter & Gamble, their whole business model is driven by 3 distinct themes that form basis of their strategy (p. 141-142): 

Make the consumer the boss.

The aim of the company is to literally “improve the lives of customers” (p. 142), and this means that if the service/product that the company is offering is not contributing positively, then there needs to be a change.

This means also that the customer is the focus of all activities from “innovation, branding, go-to-market strategies, investment choices”.

Win the consumer value equation.

The company seeks to make sure that their products deliver “unique value” while maintaining their profit margins yet being affordable to customers.

This means investing significantly in innovation, improving their products and all the activities across the company so that they can keep winning in the market place.

Win the two most important moments of truth.  

The two important moments of truth are “when the customer encounters the product in the store for the first time and when he or she first uses it at home” (p. 143).

Both of these moments are interconnected and need to live up to the brand promise: did the stains get removed? Did the customer get the service he or she expected based on what was advertised?

In here, feedback loops and learning across the organisation are essential so that products can be improved, trends can be understood in advance, and changing social and economic contexts taken into consideration.

 

Belong

I have unsuccessfully tried to get wireless Internet to my house. I say unsuccessful since after almost 2 weeks activating my account, I have nothing.

I have so far spoken with 9 different people who each of them have said how my matter is very important, that they will escalate the matter and that someone will be in touch with me.

Each time I call the company, I get a new person on the line who is frankly not very interested except stating the common line of “I will escalate this order and we get this sorted”.

Nr 9 was the most helpful and seems to actually looked into what the problem was with the order.

The company calls customers and if you miss a call from them, they won’t send an email.

But for most professional people email is much easier to handle as sometimes, like many times I am, in a meeting and cannot just pick up the phone.

After speaking with that many people (and more to come for sure), I can’t help but wonder why the customer service trend is nowhere close to where they could be if they would live up to their brand of “making everything easy”.

This is the most I have had to struggle with an internet provider.

 

Qantas

Although this is not move related, I thought this example is quite interesting in terms of customer service.

I left my notebook in the plane recently (with 8 years of notes in it). I reported the book and initially got a call that it had been found.

The Qantas lost property office in Brisbane International however only takes voicemail messages and when I had to check more details about how to get the book, I could not get a hold of anyone.

I wrote emails to Qantas, I chatted on the web about the matter, just to get the response that of course my notebook would be there and the customer service is looking after it.

I left 5 voicemail messages to this office, the last one noting that I would come the following week to get the book in person as I had managed to organise so that I could take the train (nearly 2 hours one way) to the terminal and fetch the book myself.

I showed up on the day and was told that the notebook had been thrown in the trash over the weekend.

Apparently “there is some really great staff working at this office” and then there is also staff who just don’t do the right thing.

What was interesting to me was that I already had left 5 messages in that voice mail with requests of someone calling me back with my contact full details every time.

So apparently the great staff must not have listened to these but the other staff.

They did in the end pay for my taxi back to the city.

Yet, there is no compensation possible for that notebook and the 8 years of notes (note to self: check the floor space as well for items when leaving the plane and take all notes electronically).

 

RACQ

I had to change my insurance details and I called the company to update my details with the move.

The lady on the phone was so helpful, arranged everything quickly, and also gave me additional information about my insurance that I didn’t even realise to ask.

Walking away from such an interaction makes me at least feel that I am putting my money into the right company and that this is as much about my well-being as it is buying a service.

This is not the first positive interaction with this company but rather a customer service trend that I experience every time I interact with this company.

Every staff member I have spoken with over time is extremely helpful, checks out all information and often goes beyond that.

The staff is always professional, quick to help, wants to know more about my situation so they can give the best advice they can.

They always go beyond the standard response and to me, that is just a perfect example of how the company is winning.

 

Why feelings matter when it comes to strategy

The bottom line is that the way your company or service makes customers feel is what matters.

If you are looking for high returns but pay no attention to actual customer experience, the chances are that you will not retain loyal customers.

As Lafley and Martin note, gaining “brand loyalty” is the best win any company or service provider can have.

Brand loyalists will praise the company by word-of-mouth and are in fact a crucial aspect of building the brand on the ground.

Failing to understand and really focus on the customers’ needs and experiences will result in reduced growth via both word-of-mouth and public shaming of companies by angry customers.

So why do we still have systemic issues with customer service in companies that publicly claim to be all about improving the customer experience and having the customer at the heart of their strategy?

In the end, it is all about strategy and the 5 critical factors that either make or break you in the marketplace.

Companies that do put the customer first understand how each staff member at all organisational levels needs to understand what the core strategy of the company is about.

Customer service systems then should also reflect this.

 

Rise of adaptation services

To make this long post even longer… So why is this a timely reflection also for us who work in the field of climate adaptation?

Increasingly there is an acknowledgement that in order to adapt successfully to climate change, we need more knowledge and services that can help us to use that knowledge.

Whoever and whatever companies and organisations work in this space, we have a lot to learn from businesses like Procter & Gamble in how to deliver services and products.

But keeping the customer at the forefront seems to be the key.

I’ll keep my thinking hat on on this one how we can do this better and how the science – policy linkage can enable more useful adaptation services.

 

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