Bureaucracy kills customer value creation 

Do you have energy vampires in your organisation?

When I read this recent article from the HBR blog How to stop people who bring things down with bureaucracy I couldn’t believe how it totally nailed many of the more motivation sapping experiences of academic and commercial life.

Author James Allen describes ‘energy vampires’ who create diversionary none value add activities.

These activities however well intentioned adversely diminish the energy and action that should be devoted to the creation of customer value.

Of course most organisations need some systems and processes to function. Sociologist Max Weber pointed this out years ago. The problem occurs when bureaucracy becomes self serving and self perpetuating. Bureacracy can be characterised by mindless demands for information, defensive records of decisions and actions – ‘just in case’ something bad happens, a form for this a form for that, multiple sign off forms, lots of data creation and little insight and information agility.

One of foremost writers and researchers on Bureacracy is David Graeber author of The Utopia of Rules. He recently wrote an article for Times Higher titled Why Won’t Academics Break Their Paper Chains.

I would recommend any business person to read his work to see what can happen in large organisations when the value creating imperative of the business is smothered by bureaucracy.

One on the central themes in our forthcoming book Value:ology is about the value creating and proposing capability of people in your company. With Co-authors Simon Kelly of Sheffield Business School and Stacey Danheiser of Shake Marketing we emphasise that without a dedicated focus on value creating activity you will waste time, money and energy on irrelevancies.

So can you spot the tell tale sales of value smothering in your business? James Allen gives a clue when he says watch out for people that:

‘….fire off lots of missives that force your people to stop serving the customer and instead respond to yet another information request’

 

Creating brand love means being tough on value 

Brand Love
One of the big ideas in brand management is the creation of brand love.  This is where the solutions you sell and the customer relationships and experiences you create result in customers who are passionate and committed to your brand.

But have you stopped to really think through what generates this passion and commitment in the first place?

The only way customers will love your brand is if it delivers value in a way that matters to them. True value resonates with your customers. This means you need to be tough on value in your organisation to prevent it being treated as ‘taken for granted’ or ‘glossy rhetoric’.

Adding value and creating customer value are often snappy sound bites that are very easy for people to buy into.When this happens you could have a serious problem when it comes to establishing what value means for your business. Ask yourself honestly; does everyone in the organisation have an aligned view on what are people talking about when they talk about value in general and customer value in particular?

Get tough on value conversations in your organisation by doing three things.

  • Don’t confuse it with satisfaction because that is only about after the purchase. It says a lot about wants and little about real needs.
  • Don’t confuse it with quality because that is about technical standards.
  • Don’t confuse it with your values because they are about you and not the customer.

Are you sure your team knows the difference?

Organization psychologist Kurt Lewin said there is nothing more practical than a good theory. He said this to make managers realise that an assumption has a direct influence on practice. Mistaken assumptions about ‘what’ value is results in irrelevant marketing implementation.

You can think of defining value in your business as just as important as NASA getting the trajectory calculations right for a space exploration vehicle such as the Mars Curiosity Rover. Even a small miscalculation on launch could have resulted in Curiosity missing big the red planet by thousands of miles.

Let’s say you assume that the primary benefit your customer is seeking is the best price. This might seem reasonable because the customer always mentions the price in conversations. Acting on this assumption could lead you to being way off target. Deeper understanding of the customer through careful unpacking of what is going on in their business world reveals that they value your detailed expertise and network of suppliers which means the relationship they have with you helps them compete in their market more effectively. The real value is in the supplier relationship not in the price.

If you don’t ask tough questions about what people mean by value then there is a very real risk your plans, product developments and campaigns will be off target. Worse still you’ll get locked into a cycle of repetitive problem solving as one thing after another is tried in the elusive hunt for customer value.

Barbara Caroll and Aaron Ahuvia in their article Some antecedents and outcomes of brand love – Market Lett (2006) 17: 79–89 define  brand love as “the degree of passionate emotional attachment that a person has for a particular trade name.”. A definition such as this is helpful in focusing attention key brand love attributes.

The challenge for the professional marketer of course lies in creating specific actions that predispose the customer to fall  and stay in love with your brand. It’s issues like this that are at the heart of the work my publishing colleagues Simon Kelly of Sheffield Business School UK and Stacey Danheiser of Shake Marketing USA address when they talk of the need to create resonant value propositions and ensure that sales and marketing activities are aligned.

Brand love needs a bit of tough love too.

If you are interested in the academic research into brand love then the following might be of interest:

Fournier, Susan (1998), “Consumers and Their Brands: Developing Relationship Theory in Consumer Research,” Journal of Consumer Research, 24 (4), 343–73.

Albert, Noel, Dwight Merunka, and Pierre Valette-Florence (2008), “When Consumers Love Their Brands: Exploring the Concept and its Dimensions,” Journal of Business Research, 61 (10), 1062–75

 

 

UK Politics not governed by advertising standards


Given the controversy of claim and counterclaim during the UK referendum on membership of the EU it’s interesting to see the difference between selling products and services and selling political ideas.

Aldi recently fell foul of the Advertising Standards Authority on an issue about claims they made about potential customer savings. 

However:

The Advertising standards authority state in their codex under section 7.1 that.

Claims in marketing communications, whenever published or distributed, whose principal function is to influence voters in a local, regional, national or international election or referendum are exempt from the Code.

Regardless of any ruling like 7.1 above that might be modified the ASA states its mission is to provide marketing communication rules that mean:

advertising must be responsible, must not mislead, or offend 

What do you make of that?

The limitations of personality tests for advertisers

Sheffield Business School Student shows just how to create blog on serious topics engaging

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Gray (2015) states that the personality testing industry is worth $2 billion. Whoever invented the initial personality test would now be like

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When it comes to advertising and targeting potential customers, personality tests may have several limitations. As I explained in my previous blog, personality tests sometimes do not always prove to be accurate. Giang (2013) implies that the test results can sometimes be flawed because respondents may answer how they think you want them to, so you do not have a true representation of their personality. This not only wastes time, it wastes a LOT of an advertiser’s money if they are advertising a product towards someone how would not dream of buying it, but said they would in a test.

If this is the case, an advertiser might as well just do a Leonardo and throw their money away!

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Another limitation according to Burnett (2013) is the limited answer…

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Don’t confuse customer value with customer satisfaction 

  

I’ve been watching the channel 4 documentary series British Army Girls which follows the lives and experiences of young women during their initial military training. 

There have been a few documentaries of this type and watching how people transform over the weeks is captivating. 

An incident in last nights episode got me thinking. The recruits were on a three day field training exercise towards the end of the first phase of becoming professional soldiers. The women were tired, cold, and fed up. They had been subject to mock attacks on their patrol and were being pushed to their limits by their officers.

Stop. 

At this point if we were market researchers and we wanted to know how good the service experience was we would do a satisfaction survey. Guess what the results would be pretty dire. Just listening to the girls in the documentary is enough to tell you ‘at that point’ they were very very unsatisfied. 

Start.

Now fast forward to the end of the exercise and imminent passing out parade. The girls expressed how amazing they felt at being challenged, how they had faced and overcome things they didn’t expect and how a great sense of professional pride and self esteem had been created. The recruits had clearly derived immense value from the experience. Value that would serve them well time and time again in the future. 

In modern management and particularly in the public sector it is fashionable to be obsessed with satisfaction metrics. Doing this is meant give commercial teeth to soft public service delivery. The problem with this approach is that it is underpinned by a simplistic assumption that we are all customers and displays an impoverished understanding of the latest marketing thinking. This satisfaction metric approach is at least twenty years out of date.

The argument runs that because services are ‘paid for’ via taxes, student loans etc we are thus ‘customers’. Satisfied customers come back and tell others how good the service is and so their satisfaction matters. 

This whole customer centricity argument has been a main plank of marketing management thinking for decades. Hence a fixation on customer satisfaction. 

Current academic marketing research on real world commercial businesses challenges this view. Measuring satisfaction does not give you a fix on the value created. Evert Gummesson suggests that customer centricity is a wild goose chase that ignores the real complexities of value creation and delivery for all stakeholders involved and that includes the service provider as well as the customer.

In our forthcoming book provisionally titled Unlocking Customer Value (Simon Kelly, Paul Johnston and Stacey Danheiser) to be published by Palgrave Macmillan we explain that there is a crucial difference between quality, satisfaction and value

Academic Robert Woodruff says that a problem with value is that it is often used with other hard to define terms like utility, worth quality, satisfaction and benefits. 

Let me share a couple of everyday business examples to illustrate the distinction between the two concepts. I worked for two decades in the gambling industry. In the long run most players lose. So if you ask satisfaction questions then most players are disatsified. Probe on value and you get a different perspective. Players will talk about the value they get from trying to beat the slots, the social value of passing the time and the buzz and excitement of playing etc. 

Budget airlines often get complaints from disatsified customers annoyed at pay as you use services. However the value of cheap tickets and efficient boarding and disembarkation often trumps the dissatisfaction. 

For sure customer satisfaction is one very common and in the right place a worthwhile measure of marketing effectiveness. The problem with satisfaction measurement is that it can only be measured after the customer has used or experienced the product or service at a specific point in time. This might be ok for a product. It worked well or it didn’t. Service value on the other hand works through time and can be derived way after its initial delivery. Measuring the satisfaction you get from something is always immediately after the event. Measuring satisfaction is not measuring value. Ultimately it is value we pay for. As Warren Buffet said:

“Price is what you pay. Value is what you get”

Value is different and can be judged before, during and after the experience. It is the worth of something regardless of how satisfying the experience seemed at the time. 

Value also emerges out of the difference between expectation and experience. Professor Sam Ham in his book Interpretation: Making a difference on purpose. Explains that setting out clear expectations affects our sense of value. 

The army girls were told continually to expect challenge and hardship, pain and fear – hardly things you would associate with satisfaction. The expectations were clear. Surpassing expectations delivered value.

Here’s one final example. The Century Egg. A highly valued Chinese delicacy. Highly valued and yet:

‘the yolk becomes a dark green to grey color, with a creamy consistency and strong flavor due to the hydrogen sulfide and ammonia present, while the white becomes a dark brown, translucent jelly with a salty flavor.’ 

How satisfying to eat must that be! 

So watch out. Don’t confuse satisfaction with value. 

Does management destroy value?

  
I saw this thought provoking quote today on Facebook which comes from the website Keep it on the deck.

What it got me thinking about was value creation and value destruction. These are themes that are very topical in marketing academia.

Value destruction can happen through incompetence, unfulfilled  promises, rudeness, aggression. Usually this is meant to refer to service staff treating customers badly.

But what if the same applied to managers and staff and coaches and players?

In business the idea of ‘managerialism’ is taken for granted. We all assume things can and need to managed. Otherwise we have chaos and wasted and misdirected resource. Things need to analysed and controlled for there own good otherwise business would be a bun fight a free for all. Managerialism manifests itself in sport through sports science and match analytics.

Managerialism aims to stop businesses looking like a junior school football match where all the players chase like a bee swarm after the ball. No roles, no system, no tactics. 

But what happens to talent when it is overly constrained ? what happens to  what sociologists call ‘agency’, what Antony Giddens calls our ‘ability to do otherwise’?

Managerialism is a toxic phenomenon beloved by the unimaginative. They love it and enforce it control the one thing they haven’t got and envy. Talent. 

Uniqueness comes not only from doing otherwise but ‘seeing’ otherwise. This is an imaginative capability that is not uniformly distributed amongst human beings.

Soccer fans intuitively know this. The player that ‘reads’ the game differently and better to others, the player that breaks the pattern to create surprises.

So I urge managers to ask themselves if they inadvertently destroying the value that is created in their staff through their fundamental passion for customers and the service they provide.

Just look how junior doctors are being treated to see what I mean.

I don’t ever believe skill was ever or will be the result of management. It’s a result of a love affair between a person and their profession.

Disruption is ‘in’ and innovation is so 20th century

  
So claims Mary Harper -head of digital Standard Life in Marketing Week.

Talking ‘as if’ things are ‘in’ belies a fascination for the trendy and fashionable. There seems to be nothing more ‘hem line’ savvy in marketing management than the term disruption. 

The question is ‘so what’? Is disruption really new and how is it any different from innovation? 

As a piece of rhetoric it’s pretty powerful isn’t it. It evokes awareness of an edgy world where surprises happen and the need to unsettle things is essential. 

Disruption is positioned as a fearful problem that faces your business…but don’t worry your marketing people are on the case. 

Be quick on the draw. To avoid being disrupted we have to disrupt. 

I agree with Mary. Disruption is a slippery concept and it means different things to different people. One thing seems clear though and that is ‘disruption’ is an effect, an outcome that is the result of something else. That something else being innovativeness!

In that sense dirsuption is hardly new at all. It comes from imagination, avoiding complacency and critical thinking. Things that most informed business people know can make a difference. 

Disruption is therefore notice of a meaningful difference. As Gregory Bateson would say:

‘A difference that makes a difference’

So what might the unintended consequences be for unthinkingly buying into and adopting the fashionable disruption discourse? 

Less reflective marketers will simply latch onto the latest management fashion without a care for where the ideas come from or the real world consequences.

In that sense Disruption could go the same way as Salience which became a licence to shock regardless of the relevance or the ethics. 

Disruptiveness could become an arbitrary management metric along the lines of ‘I don’t think you or your ideas are disruptive enough’ – you’re fired. Even more dangerous could be throwing the baby out with bath water – disruption for disruption’s sake.

Mary introduces the idea of disruption altitude to sensitise marketers to the need to think about the type of disruption that is relevant to their business. A good idea I’d say. 

The fashionability of the idea of disruption stems from the effect of ‘I know about something that you don’t’. A glossy attempt at seeming erudite and able to see beyond the self-evident. Most cult leaders do the same.

So to illustrate just how fashionable disruption is here it is being used to explain The rise and fall of Apple phone. Does disruption actually a better explanation than not watching the competition and giving people a reason to buy your products? 

Is there such a thing as helpful disruption or do you just want to be a bull in china shop? Charging around being disruptive and smashing everything to bits in the process? 

Being wary of management fads and fashions you avoid making a fashion statement and potentially looking ridiculous in the process! 

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