Bang goes the theory

As the danish scientist and goalkeeper Niels Bohr once observed, for every expert there is an equal and opposite expert. This is especially true when it comes to managing a company where, despite the upsurge in consultants and bestselling business, there is no empirical proof that the quality of management has improved at all in the last 50 years.

Some decent ideas – matrix management, Six Sygma, et al – get promoted as panaceas, fail as much as they succeed and are replaced by the next big thing. The next big thing in 2011 is that there is no big thing, no overarching theory that promises success. But, in place of a misleading mantra comes something far more constructive. Some good, focused ideas that could improve the way we manage, many of which focus on the difficult bit: making sure we do the best for our customers. Here are eight of them…

Mirror, mirror
The concept sounds like another variation on the cliché of 360 degree feedback. It isn’t. Vinett Nayar, boss of Indian IT giant HCL Technologies, says it is the only way companies can honestly scrutinise themselves. Many businesses have departments that are very good at justifying their own existence and rationalising their decisions. But they often can’t see beyond that to understand if their behaviour is really good for the business. “In the mirror, mirror process, we really tried to understand the customer’s true level of satisfaction with us and why they chose us. Did they have a die choice and select us for our outstanding service, or did they feel they had a limited choice and were they putting up with us? Did they, for example, feel that all suppliers were fundamentally the same?”
Asking tough questions, Nayar came up with the surprising slogan: “Employees first, customers second.” In his view, by putting employees – especially those on the front line – first, he was encouraging them to innovate and by becoming more innovative his company could better satisfy its customers. And it is the boss’s job to stimulate this process. Their raison d’etre, as he saw it, is to “listen, correct and experiment”. If they stop doing that, they shouldn’t run the business.

Early adopters or early sufferers?
In America, the major TV networks don’t let viewers watch the end of programme credits in peace anymore. Why? Because they found that 40% of viewers changed channels as the credits rolled. The treble whammy that has floored the US networks – the fickleness of customers, revolutionary impact of the internet and the ensuing exponential increase in the complexity of doing business – will affect most businesses in the not too distant future.
Aidan Quinn, head of performance consulting at KPMG Europe, says managers should reappraise their business: “The traditional indicators – profit and loss, balance sheets, sales growth – are becoming less relevant.” As competition intensifies, with the internet dismantling barriers to entry and eroding customer loyalty, Quinn believes: “Companies should focus on the underlying drivers of value in their business, exploring things like brand loyalty, or how they maximise their human capital and develop performance indicators around these drivers – for example, by targeting customer churn – and delivering increased value in the longer term.”

It’s good to be good
Most businesses regard corporate social responsibility as a drag, or a quasi-legal obligation. But could 2011 be the year it becomes your competitive edge? In a digital age, bad companies have nowhere to hide. Whether you’ve been mean to your suppliers, let down a customer or damaged the environment, the word will be out there faster than you can say ‘viral marketing’.

So CSR makes sense purely as a means of defending your reputation and your customer base. But the values you instil in your employees could deliver an immediate return on your investment, ensure your survival and reduce your legal bills. The great corporate scandals of the last 20 years – from Enron to Lehmann Brothers – had one thing in common: somebody internally knew something was wrong, but didn’t speak out until it was too late. So stop seeing CSR as a bolt-on and ask: are you embedding the right values into our company culture? If we don’t believe we are, it’s time to act unless we want to meet the same fate as Enron and Lehmann.

There’s customer service and there’s lip service
A new kind of design is emerging which goes beyond the traditional craft-based approach. Some of its advocates call it co-design because a designer is designing with someone, not designing for. One of the designers pioneering this approach says: “A lot of companies call themselves customer facing then they really aren’t. They might only engage with customers through focus groups or a marketing campaign. And they don’t really know how if their products and services really satisfy their customers.”

The aim is to go deeper and not be content with an order placed grudgingly by a customer who thinks you are the least worst option. By encouraging the customer – and the end user – to discuss their needs, and help devise a solution, designers realise it is easier to get a customer to buy in.

This won’t work for all customers and all projects, but the insights gained can create a product that transcends expectations. It might all sound a bit woolly but it is, in some ways, further proof of a phenomenon known as the Ikea effect after research found that customers who laboured to assemble the Swedish giant’s products from those often perplexing diagrams loved the results more than if the furniture had arrived ready made.

Expect the unexpected
Yes, it’s a cliché but many companies are still run in top down command and control mode where the word from the boss’s office is: “No surprises”. Yet as the great management theorist Peter Drucker once said, one of the best ways to generate ideas is to study surprising successes and failures. A ‘no surprises’ policy often ensures that small, suppressed or unacknowledged surprises become big, expensive, unpleasant ones. If one of Thomas Edison’s underlings hadn’t had the nerve to confront the great inventor, he might have spent the rest of his life trying to sell the phonograph as an aid for letter writing.

Full spectrum management
This is a slightly jargonistic term for something you should be doing anyway - managing everyone. Not just ensuring your high achievers get the recognition they deserve, but that you understand which of your low achievers are in the wrong job, need coaching or should be let go.

Accentuate the positive
It was easy for Bing Crosby - he had the lyrical prowess of Johnny Mercer and the Andrews Sisters on backing vocals to keep him in a good mood. But it will become one of the major management changes of 2011. There’s plenty of advice online about how bosses can stay positive – much of it as obvious as “Find the silver lining” – and some of it as corny as the state of Kansas. But read the biographies of many business leaders and it’s how astonishing how often you find they had signs in their offices containing such aphorisms as “no whining” (which belonged to the founder of Southwest Airlines), “be realistic, demand the impossible” (on the former CEO of Cypress Semiconductor) and John Le Carré’s famous maxim “A desk is a dangerous place from which to see the world” which used to hang in the office of the former IBM boss Lou Gerstner. Le Carré’s observation is especially pertinent in hard times when too many managing directors retreat to an office out of their employees’ eyeline and bury themselves in admin. That’s not exactly leading from the front, is it?

Gandhi, the new management guru
In one episode of Only Fool And Horses, Trigger casually remarked that Mahatma Gandhi had had his 15 minutes of fame: “He made one great film and you never heard from him again.” Yet Rosabeth Moss Kanter, one of the most influential academics at Harvard Business School, says every business leader should heed one of the Indian visionary’s most famous pieces of advice: “Be the change you seek to make in the world”. She adds: “This reminds is all that one of the most important tasks is personal - to be a role model, exemplifying the best of what the change is all about.”