Thursday, May 1, 2008

Human Capital: It'll Make or Break You

You read about it in the current business magazines. "Develop Human Capital as a Top Priority." It is the only real way that yours, or any company, has any hope of gaining the increasing profitability necessary to survive in today's hyper-dynamic business environment. You want to get on board.

So, you implement HR practices which you hope will help. You focus on recruiting. You find the people you want. You provide good offers, and good benefits. You orient them, then train them. You indoctrinate them. You school them in your corporate processes and procedures. 90% of their training time is focused on your industry, your product, and your company. 10% or less talks about your customers.

The honest result: Your employees are trained to care more about your company than your customers. And you feel good about it.

You prefer employees to be more interested in your company, in your processes and in your procedures than in those of your customers. That way, they'll watch out for your interests. Overly "customer-focused" employees would give away the store, and with it, your profits.

The very practice is backwards, and actually costs you money.

Can your employees be too customer focused? Probably not. Not if you're reading this and asking the question. You probably do train them to understand and preserve your internally focused processes and activities already. Their primary focus isn't about "What I can do to make my customer's experience better today," leading to increasing profitability, it is more like "What can I do to increase my sales?" or "How can I handle all these emails?" or "How can I increase the number of customer service calls I handle?"

Notice: "What do we need and want?" vs. "What does my customer need and want?"

My Security Company Almost Lost a Good Customer: Me.

I have worked with a specific alarm company for almost a decade, paying them $35 or so each month for monitoring an alarm at my residence. It has been an uneventful, neutral relationship. Then, I needed something, and all that changed.

The company had installed an equipment "upgrade" just a week or so ago. At 9:30 on Sunday evening, the alarm went off. No reason that I could tell. I cancelled it, and assumed it was fixed.

At 10:00, the warning blast sounded. Again, I cancelled it. 10:15, 10:25, 10:30. By now, even I knew that there was a problem I could not correct.

Customer Problem or Company Problem?

I called the 800 number for help. A professional sounding security person answered. It only took 30 seconds to learn that she cared more about her internal protocol than she did about my problem.

"I'm sorry you are having this problem, Mr. Coolidge. When was the last time you tested your unit?"

"I don't know how to do this."

"Well, your instruction manual says that you are supposed to run a test once a month. You say you've never run this test? Well, that's your problem. Lets run the test. . . "

I dutifully pushed the buttons and listened for the sounds as instructed. After all, this service person has made it clear that "user error" was at fault. She know a lot about her company's service protocol, but she didn't know a thing about customer solution profit.

Let me cut to the chase. 20 minutes after that call, the alarm sounded again. It was now almost midnight. I couldn't survive an entire night of this!

I called the 800 number again, and another security person answered. I explained the problem, and, once again, she began the same diagnostic process that had been unsuccessful before.

"There's nothing we can do, Mr. Coolidge. If you would like to schedule a service call, we could do that. It will only cost $. . . " Sounds like this employee was watching out for the company, right?

"Wait a minute," I was concerned. "This alarm is going to sound every 30 minutes or so all night. I can't have that. I'll pull the thing off the wall."

"That would be a violation of your contract," she said, still serving the company.

"Can you send someone out now?"

"That's not part of your service. I'm sorry, Mr. Coolidge. I can schedule a service tech . . . " The alarm company was seeing this as my problem, even my fault. The tech had been well trained.

A customer lost is profit lost.

I hung up, ready to violate my contract, which would be cancelled at the same time. I was a customer, I needed a solution, and, since my alarm company didn't want me to have one, they were on the verge of losing profit.

Imagine this same thing, happening over and over again, in industry after industry, day in and day out. Customer service people with a chance to improve a customer's experience, and with it, loyalty, and with that, extension of service, and on what are they focused? On themselves, and their own company policy, protocol, process, or needs. This focus put my alarm company minutes away from the loss of monthly recurring revenue, the loss of profit.

I made one final call. One more desperate attempt to fix the problem.
The phone was answered by a different security customer service person. And, this time, for whatever reason, she had a different focus. She had my interests in mind. She was also interested in increased profitability for her enterprise.

"This is unacceptable, Mr. Coolidge. We need to get someone out there right away. You have a service component in your contract, so this in-home call won't cost you a thing. I know that it is late, but would it be OK if we had someone there in 30 minutes?"

Excuse me. Where was this person on my first call? She seemed to be concerned for my deteriorating state.

The tech arrived, pulled the unit off the wall, and discovered that the upgrade installer had done a sloppy wiring job. The short circuit was causing the alarm to sound. It wasn't user error after all. It was installer error.

What causes a customer to leave, or to stay?

The first 2 service people I had called ought to be fired. They had pushed me to leave their company, and to discourage anyone from ever doing business with them, forever.

I doubt this company even knows how many customers leave for reasons like mine. I know they have no clue that I was as good as gone - the fault of one of their company-centric employees. I know they have no clue that I am still their client - through the effort of only one customer-centric employee.

In fact, the unmistakable and only difference between declining and increasing profitability is the difference between the "company-focused" and the "customer-focused" employee.

Which Costs More?

It doesn't cost a company any more to have employees who care more about customers, more about customer's needs and preferences than employees who care more about the company's policies and processes.

But my alarm company believes it does.

In a way, I suppose they're right. It costs them customers.

No comments: