June 26, 2017


















Article 3.13

MAINTAINING DISTINCTIVE SERVICE VALUE

The CEO of an industrial paper and packaging distributor ("ServeCo") recently asked me how to revive his "basic service brilliance" program and then keep it from backsliding once again. He and all of his "associates" had been through an extensive "customer profitability, service reinvention process". (NOTE: In 2002, ServCo ran all of their employees through the 53 modules of the video training program, "High Performance Distribution Ideas for All". For more on this revolutionary system go to www.merrifield.com. All other notes are covered in the "Support Notes for article 3.13" at www.merrifield.com.) They identified 8 service metrics numbers to significantly improve, and they did so in a nine-month period.(2 - 3_13SupportNotes.asp) They maintained their new level of service intensity and integrity for about another year during which sales growth accelerated and profitability improved dramatically. Their customers raved, target accounts were peeled away from competitors and big gainsharing bonuses were earned by all for ’03!

But, ServCo’s service intensity and quality began to erode, imperceptibly at first. Service numbers weren’t being consistently posted, and some were being fudged to the high side. The competition fought back by improving their service levels and their counter-promotion hype. ServCo’s distinctive, service edge was minimalized in the eyes of the customer. Sales and profitability were still at a new plateau, but the momentum of the company and the spirit of improvement had stalled. Doesn’t this story sound like many weight-losing or get-fit programs that work at first?

What should our friend do? What should any of us do when we fall off of an improvement path? We might first review the factors that combined to knock us off the path. In the case of ServCo, here are some of the path killers the CEO noted:

  • One of three locations had a branch manager who never really bought in to any of the change; he just paid lip service to it all and kept on trying harder with the old ways. His branch continued to let down the other branches on inter-branch service exchanges while benefiting enormously from the "other branch first" service from the other two. This was demoralizing to the other two. One bad apple did spoil the others.
  • There was some natural employee turnover problems. New people were not thoroughly indoctrinated, and many of the regulars started to have faded memories of what was behind the entire profit reinvention program.
  • The constant barrage of new requests from both new and old suppliers and customers started to push everyone back into doing the same old reactive, emergency activities causing them to cut corners on both preventative and proactive service quality efforts. Cycle counting days would be missed in the warehouse. New emergencies distracted customer service people from giving heroic extra service efforts to best and target accounts. The total environment will push back against our improvement efforts until the original status quo (homeostasis) is achieved. Or, can we change the environment and protect it from outside forces like the Dutch have done for reclaimed land behind strong dykes against the North Sea?
  • The service numbers on the wall got emotionally stale. One super star service manager got promoted to branch manager (of the branch that wasn’t doing the program). But, then both she and her replacement were struggling with new challenges. The ability to hire and properly train the right people should determine the growth rate, or the service culture can be diluted and fail.
  • Everyone had gotten a bit arrogant by comparing ServeCo to the mediocre distribution competition instead of staying on their own continuous improvement path. A phrasing of the attitude might be: "Relax, we’re still so much better than the other guys (who were now trying harder after losing key accounts); progress is assured." Humility in the face of all that we can continuously learn is the best policy.

RECOMMENDATIONS

Here were the ideas the CEO and I settled on:

  1. Get everyone to "name it, claim it and integrate it". Everyone needs to admit that we collectively fell off the service excellence path for the reasons stated above. But, that’s OK, because we are human and most everyone gets knocked off improvement paths sooner or later, more or less, for longer or shorter time periods. We just have to stop fooling ourselves and learn to systematically anticipate and deal with all of the forces that can combine to keep us from what we know we want to do.
  2. Because service wisdom memory does fade with – time, turnover, promotions and constant new fire fighting pressures – we have to systematically renew it. As a first priority – no shortcuts or delays – every new employee should go through an intensive orientation process which involves veterans teaching all of the different customer profitability and service improvement (and now service maintenance) lessons. Because first time teachers learn more than students, this will be a key method for overcoming fading service religion fervor (3 - 3_13SupportNotes.asp).
  3. To systematically address: getting and keeping energy for change and on-going service mastery; and avoiding the pitfalls along the path, buy George Leonard’s excellent gem of a book entitled "Mastery". Reproduce his two-page summary in his last chapter for group discussion. Invent system solutions for all of his points to stay on the path.(4)
  4. Create an optimum amount of measurable, internal competition in a fun, co-opetive way between branches and individuals to see who can continue to find new ways to improve and maintain service excellence. Target the intensity and pace of these measurements and competition to the middle 60% of the employees assuming about 20% are quite disciplined and another 20% are not. Anson Dorrance’s book entitled "The Vision Of A Champion" may help to inspire the development of a service measurement, co-opetitive "cauldron".(5).
  5. Because some employee departures are inevitable in any big change program, it is best to proactively recruit new "tigers" and have them on file to steal from another employer when an opening does occur. Our ability to successfully confront and deal with a laggard is in direct proportion to the attractiveness of our potential replacement on file. Who want’s to let someone go if there is no replacement in sight? And remember that 80% or more of having happy, high performance employees is how you pick them in the hiring process; the training and systems accounts for the rest.(6)

CONCLUSIONS

Both obesity and service mediocrity are current epidemics in the US, but they are symptoms of what deeper causes? Some of the root causes, I believe, are a lack of and belief in "mastery" training as well as a shortage of "be the best you can be with other team member" experiences.(7) These best experiences can happen within classrooms, sports teams or businesses. Through these experiences we can learn how to have the will and confidence to reinvent both our environments and ourselves so that all team members benefit. We also learn that the choice in life and business is not to be nice and get along with everyone by not competing with others about who is more proficient and responsible and who is not. But the choice in life is to compete with others measurably when ever possible to improve all of our performances. The best in these internal competitions, don’t get extra rewards just more responsibility to help with tutoring the less proficient, because the bigger win (the gainsharing bonus for ServCo) comes at the team level against the outside competition whether in sports, business or even inter-national competition for good jobs.

Link to Support Notes for this article: 3_13SupportNotes.asp.

© Merrifield Consulting Group, Inc. Article 3.13

D. Bruce Merrifield, Jr.