Is losing a customer really worth just $11?

My wife is an avid online shopper. It’s convenient, you can comparison shop, you can do it at 2 in the morning when you can’t sleep,  you can buy stuff you wouldn’t be able to find in a store, etc. etc. She has loaded up an Ikea file drawer with a plethora of nail polish this way. We’re talking lots of polish. 100+. She has even developed a good reputation with several smaller-batch polish and makeup makers because of her loyalty and recognition of good product. Several will send her extras and samples with her orders because they recognize a good customer. However, recently one of these small companies decided that fixing their own mistake and trying to cheat her out of $11 was worth more than getting some more repeat business out of her.

 

She had ordered about $60 or so worth of various products from an online store. She got her confirmation email and we went off to dinner. About 2 hours later she got another confirmation email for the same order. She figured it was a mistake in the system, the email got sent twice. No big deal. About a week later 2 orders of the exact same thing showed up. She contacted the company and they said they wouldn’t take it back because it would cost them money to resell, restock, and they’ve already shelled out $11 to ship these items to her. She explained this was not her fault, it was theirs and she didn’t really care about them being out the money for their own mistake. She wanted her duplicate order money refunded and for them to cover shipping. This doesn’t sound like it should be rocket science, but apparently the decision making process at this online store is lacking.

 

They kept trying to guilt her into this over the course of several emails. Finally, my wife got annoyed stating that she has bought from these people many times before and couldn’t believe the treatment she was receiving. Let me reiterate that UPS basically has a parking spot in front of our apartment from all of the beauty supplies she buys every week being delivered. This was the last straw with them not admitting their mistake or demanding she split the cost of this mistake with them, or any other ridiculous thing. She said she would take her business elsewhere. Their response: “You’re the one who’s willing to cut ties over $11.”

 

Well, no. They’re the ones willing to cut ties over $11. They’re the company looking to sell items and my wife is the one with a gazillion options on places to shop. So, even if this was an honest mistake on their part they handled it poorly. Even if this situation were completely different and it was my wife’s fault, they need to understand that this poor customer service experience has cost them a ready and willing customer who loves to get any new shade of nail polish she can. For $11 they decided they stood on stupid principle. They need to realize that the first 2 rules of customer service are: 1)the customer is always right, and 2)reread rule 1. Rudeness and guilt are poor ways to run a customer service department. It leaves a lasting impression that will leave people not spending money with you and blogging about it on the internet.

How to keep your employees happy and lower your turnover costs

I have explained my job and studies to many people over the last few years. I basically sum it up that I want to help make employees happy at work so they come back the next day. Some people look at me a little cross-eyed like I’m some feelgood hippie that just walks around with sage smoking in an office to ward off evil spirits. Many many many more people’s eyes light up and say something to the effect of “man we could use someone like you.” To the owners and managers out there, listen to your employees that want someone like me to help you help them. It’s not about being a feelgood hippie type. It’s about doing some simple things to set yourself and employees up for success. Just think of all the things you have to do if they get unhappy and leave.

You spend money on the lost productivity of an unsatisfied employee or absent employee. You have to pay to advertise a new position availability if they leave or are fired. You have to train them, which again costs money and lost productivity from your trainer. Background checks and reference checks cost money. The time it takes to recruit and review resumes will have to come from somewhere (another loss in productivity and more money thrown away). Overtime to catch up on all that lost productivity. On top of the unanswered question of how many customers were alienated by an unhappy or overworked employee? These are all costs that can be minimized if you just do things right the first time.

 

1) Treat your employees like they deserve to be treated or like you would want to be treated. It’s the golden rule. Not hard. Let’s move on.

2) Train effectively. If you are going to take the time to train a new employee do it right the first time. Don’t waste your and their time as well as your money doing an ineffective job. By laying out the rules, regulations, expectations, and tools necessary for the new employee to feel comfortable and confident in their ability to do a good job for you. They will always have questions, that’s normal. But the more you can limit the 2nd guessing of themselves and of your company the better off they’ll be, the more confident in your decisions they’ll feel, and the more productive (ie more money they’ll make for you) they’ll be.

3) Be just and fair. I’ve written about this before (http://bit.ly/xOLIhm) but I can’t stress this enough. Everything else is derivative of this concept. Your training is derivative of justice. Promotions are derivative of justice. Bonuses are derivative of justice. Your feedback and employee reviews are derivative of justice. Etc etc. If you have an employee who feels they were passed over for a promotion because they were unjustly treated, the process for selection was bogus, or they weren’t even considered then guess what: They probably won’t work as hard or as long for you anymore. That isn’t to say you have to pander. People can handle being told “no” if it’s done fairly. If you need to take the time to sit down and discuss the decision process with them then it is well worth your time to do that. Which brings me to my last point…

4) Keep communication lines open. As I’ve told several managers at this point, there is no difference in what you say to your employees and your kids, just how you say it. Don’t condescend to your employee, but make sure they know exactly what it is that you want from them. Then give them the freedom to go do it (http://bit.ly/HOYS9f)

 

Pressing the reset button: Getting a new fresh face to your business. What Peyton Manning and the Colts have in common with you.

I am a big advocate of promoting from within. The people you have hired and employed deserve the first shot at any promotion. They know the business, the culture, the mission of what you are trying to do, the politics of the office, etc. Not only that, they will probably resent being passed over for some “outsider” to the position they “deserve.” It goes hand in hand of procedural justice. If someone feels like they didn’t get treated fairly for this promotion then their work product will probably suffer.

 

However, in honor of my favorite football player, Peyton Manning, getting released from the Colts today, I want to explore the other side of that coin. Manning has been the face of the Colts for about 13 years or so. He has been the most important player they’ve ever had. Just as Babe Ruth built the old Yankee Stadium, Manning is responsible for the state of the art, billion dollar Lucas Oil Stadium in Indy. Letting him go is definitely a signal that change is imminent. Bringing in that new face, whether Andrew Luck to play QB, or a new employee to your business at home gives that air of freshness, a new start, and a different perspective to usher in that new era.

 

It isn’t always a good thing to continue having the same people working for you. Sometimes shaking up the perspective and bringing in a new dynamic and method is just what the doctor ordered. While I am sad about Manning going elsewhere, the excitement of the “new” will get people re-energized. When you have the opportunity present itself, look to see whether a fresh face to lead is what you need.

Managers and parents: Why being a boss isn’t much different than being a parent

As I consulted for a local charter school a few months ago I was discussing different leadership techniques with the principal. He was wondering why he was having so much trouble getting everyone in line, to listen and respect his authority, to follow his direction, etc etc. He was having a difficult time with this which was posing problems for the entire school as everyone was off doing their own thing and didn’t really have a specific direction to go. So I ask what he was doing to get people to follow his lead. To get people to respect him. To get people to listen. To get people to know what they’re supposed to be doing. He responded by basically saying he let them figure it out for themselves. Hmmm. Not good.

 

Why would people listen to you if you’ve never expressed your desire to lead? Why would they trust you if you haven’t demonstrated you should be trusted or followed? He understood his lax style of leadership was the root cause of a lack of direction for the school and the teachers. He explained he did not want to come across as “mean” or “bossy” and so he never really did much to establish his leadership. This is something I run into a lot in managers. They compensate for not wanting to rule with an iron fist by being weak and acting like a doormat. When I explained that this would be a really bad way to parent his kids he understood.

 

There are many reasons why “management styles” and “parenting styles” have the same categories. “Authoritarian,” “Authoritative,” and “Permissive.” There isn’t much difference in how you should parent and how you should manage. In both cases you are expected to set up rules, regulations, boundaries, expectations, and let the child/employee explore how to get there. When mistakes are made, you help them to correct them. But there is a a great medium ground between being permissive and authoritarian.

Being a “permissive” parent is like being Deena Lohan or Lynne Spears. You set no ground rules, let the employee/child figure things out on their own and offer no guidance when things go awry. You want to be their friend more than their boss/parent. You are however, not there to hang out and be buddy-buddy with them. Your job is to lead and direct. To set rules and discipline when necessary. Without this direction, the employee/child will become maladjusted, immature, and entitled.

An “authoritarian” parent is kind of like an Ike Turner or Michael Lohan (understand why Lindsay is so screwed up). They rule with the aforementioned iron fist. It’s their way or the highway. They are strict and punishing when the rigid demands aren’t met. This leads to children/employees who are gun-shy, mistrustful, and apprehensive to make any decision for fear that they’ll get their heads bitten off.

The nice balance of these two is having and “authoritative” boss/parent. This is Ward Cleaver. This is someone who allows you to make mistakes and figure things out on their own but will rein you in when those mistakes are made and help you re-correct your path. Expectations are laid out, rules are established, but some leeway is given for you to figure out how to get there. Being a good boss or a parent should be the same. Give some direction, lay out to your employees/kids what you want from them, how to behave what the laws of the land are, but allow room for growth and exploration for your kids/employees.

Dr. House and Problem Solving

My dissertation topic is about problem solving and how we can help to improve it in non-native speakers. But how do we do that? How does one become a better problem solver? The article that sparked my curiosity about this issue was one titled “Surprising but true: Half the decisions in organizations fail” (Nutt, 1999). Really? More than half? I reached out to Mr. Nutt about this, read parts of his book about this and his investigation into what companies do to solve problems. Basically, it turns out that they go with the first thing that comes to their head and then go with it, never to investigate again.

Well, there’s a problem in and of itself. Where’s the brainstorming? The analysis? The follow up? When I watch “House”, as I do religiously, I notice that there’s a reason he’s the best diagnostician (ie problem solver) in the medical field (and yes I know he’s not real…but he is based on Sherlock Holmes). He sits with his team, looks at symptoms, looks at possible causes, brainstorms with his people about what could and could not be the root cause of the sickness, and then reanalyzes once they come to a conclusion.

There is no “put a bandaid on it and send them packing.” For anyone who has ever seen “House” knows, there would be a lot of dead bodies right outside the hospital door in Princeton, NJ. They always think they got it right and then everything goes horribly wrong soon after. Without fail. Now, instead of throwing in the towel, they now have more information to analyze. They usually find that they are curing symptoms and not problems.

Further analysis after a problem is assumed to be solved will always turn out more and better information for an organization. This is an opportunity to learn about what is and is not strong in your structure. What can and needs to be done to improve a process. Take the time to brainstorm, use your team to parse out what is wrong. Making knee-jerk decisions will only serve to send the patient away to be found dead later. That is not effective to anyone or the business. A problem is not solved quickly, nor is the project over until you follow up to make sure the disease is cured and the symptoms are not just masked.

 

Reference

Nutt, P. C. (1999). Surprising but true: Half the decisions in organizations fail. Academy of Management Academy, 13(4), 75-90. (AN 2570556).

 

Rick Santorum and his one-sided approach

Rick Santorum said a while ago that when/if he’s elected he would not make the mistake that this President has made and surround himself with too many different points of view. He would want to encircle the oval office with like-minded people to solve the country’s problems. Now, whatever your political leanings are aside, this is a terrible terrible idea. Having a bunch of people looking at the problem in the same way is going to get you the same result as looking at it with 1 pair of eyes.

 

Living in California, it is difficult for me to even imagine living or working with people who are not part of a different culture than I am.  Even working in a predominantly white area, there are plenty of other cultures in the area.  There can be many benefits to this as well as some difficulties.  Larson (2007) found that the more heterogeneous a group, the better problem solvers they will be.  Adler and Gunderson (2008) claim that more than 100,000 high-technology, free-market firms are operating outside their own home country.

 

The benefits of a multicultural team can be many.  Earley and Erez (1997) explain that different skill sets, beliefs, values, experiences, and resources will be made available in a multicultural group.  The limitation on group think is a great benefit to a multicultural team as well (Adler & Gunderson, 2007).  The differences in backgrounds and experiences will contribute to more and better ideas, which can lead to more alternatives, but can also contribute to confusion (Adler & Gunderson, 2007).  And we’ve seen what detriments can become of group think: Bay of Pigs, the Challenger, the 2nd Iraq War, and the list goes on and on.

 

Being able to bring many different view points to the table is a benefit to an organization. You get different perspectives, different values, and different strategies. What’s the point of having 5 people with the same skill-set? Do you see any successful football teams that have 2 running backs do the same thing, or WRs with the same value? No. Because having two of the same person is a waste of your time and money. Surround yourself with ideas you don’t have so that you don’t miss anything. Close that window of weakness by getting different sides of the story. If not for your own personal benefit, do it for the organization.

 

References

 

Adler, N. & Gunderson, A. (2008). International Dimensions of Organizational Behavior (5th Ed.). Cincinnati, OH, US: Southwestern.

 

Early, P., & Erez, M. (eds) (1997). New Perspectives on International Industrial Organizational Psychology. San Francisco, CA, US: Pfeiffer.

 

Larson, J.R. (2007). Deep diversity and strong synergy: Modeling the impact of variability in members’ problem-solving strategies on group problem-solving performance. Small Group Research, 38, 413-436. DOI: 10.1177/1046496407301972.

On MLK Jr. Day, let’s look at justice in the workplace

The thing that really got me into the field of OD psychology was “justice.” I was, like many people, unhappy in my job. I didn’t think much of it because I saw that everyone was unhappy in their work and I just figured it was the way it was. Work was something to be tolerated, to earn a paycheck, and not be really fulfilling. However, being the son of an attorney, I was constantly thinking there was no “justice” in this practice. I couldn’t quite put my finger on what “it” was but I knew it wasn’t “just.” People being treated poorly, not getting the credit they deserve to help make their respective company’s an extra couple of bucks, being passed over for well-deserved promotions because the boss’ son-in-law was just hired straight out of school and given the corner office…. So what was to be done?

It was at this time that I started taking a class on Psychological research where our term-paper was to find a study published in the last 5 years and write a duplication study that would expand on what it didn’t quite hit. I set off to the library database and entered some search terms having to do with “work” and “justice.” Wow! There are actually people who research this stuff? Who knew? The article that caught my eye was “The Distributive Side of Interactional Justice: The Effects of Interpersonal Treatment on Emotional Arousal.” When I presented this to my professor her eyes lit up. She stopped the class, told everyone to discuss what they were going to do with a partner, and came over to me to praise me on my choice. It turns out she’s a Ph.D. in something called Industrial/Organizational Psychology. She set me up with a ton of resources, told me about SIOP (Society for Industrial/Organizational Psychologists) and I was invigorated to shift my focus from clinical psych to I/O or OD (Organizational Development) Psychology.

The concept of “justice” is one that looks at keeping people engaged when they come to work. As Leventhal defines, the procedural justice side is defined by fair procedures that are deemed unbiased, consistent, fairly represent all employees, and ethical. Distributive justice is the equity of wage and resources among employees. Interactional justice is the fairness perceived among peers (Stecher and Rosse, 229-230). All of these views have an impact on employee morale and output, which in turn, will ultimately have an impact on company output and profit. Past research has shown that employees who perceive to be mistreated “are less satisfied with their jobs, less committed to their organization, less trusting of their coworkers, more psychologically distressed, more resistant to their supervisors’ influence attempts, and less willing to perform prosocial organizational behaviors” (qtd. in Tepper et al, 1).

So, basically it’s looking at how employees are, or perceive, being treated unfairly and how that impacts work performance. Of course this will negatively impact work performance yet so many places fail to acknowledge the importance of keeping the workplace fair and just. On this, the day where we celebrate one of the greatest Americans of all time, one who fought for equality and justice, let’s not forget that these principles are very important inside the walls of the workplace as well.

 

References

Stecher, Mary D., & Rosse, Joseph G. (2005). The Distributive Side of Interactional Justice: The Effects of Interpersonal Treatment on Emotional Arousal. Journal of Managerial Issues, 17(2), 229-246. Retrieved July 12,2006, from CSU Sacramento Library Psychinfo database (2005-07195-006).

Tepper, Bennett J., Michelle K Duffy, Christine A Henie, & Lisa Schurer Lambert. (2006). Procedural Injustice, Victim Precipitation, and Abusive Supervision. Personnel Psychology, 59(1), 101-124. Retrieved July 29, 2006, from Proquest (1003526051)