When Merck KGaA, the German chemicals and pharmaceuticals concern, acquired US biotech equipment supplier Millipore, managers drew up a two-by-two chart representing every group in the organization on two dimensions: their importance in achieving the integration goals and the degree of disruption they would experience from the upcoming change. That allowed the leadership team to focus on supporting the people who were most important to … [ Read more ]
Many less-successful companies approach cost reduction with blinders on. They may look at only one part of the P&L, such as general and administrative (G&A) expenses. Or they may confine their efforts to individual business units. They fail to view the business as a whole, often because they rely on metrics that reflect part of the business rather than the entire P&L.
Consider an Asian telecom … [ Read more ]
As commodity prices increase, suppliers come knocking, pushing through commensurate increases. But what happens when those same commodity prices fall? Too often, purchasers fail to get a break. Consider the situation of an aerospace and defense supplier. As key metal prices rose, the company grudgingly accepted its suppliers’ price increases for machined parts. Trouble is, the company lacked good tracking data on commodity indexes. So … [ Read more ]
Not all roles are created equal. Many companies don’t take the trouble to understand which are their linchpin roles—as distinct from high-performing or high-potential people. These are roles that have a big influence on the customer experience or that provide critical support or coaching to employees who shape the customer’s response. Given scarce resources, targeting these roles can be an efficient way to raise employee … [ Read more ]
Just as the Net Promoter approach has strong descriptive and predictive power with customers, it works just as well in the realm of employee engagement. Loyalty leaders measure engagement by asking a handful of simple but predictive questions: Would you ask your friends and family to work in this company? Why? And would you recommend our product or service to your friends and family? What … [ Read more ]
If all you do is “empower the front line” — grant your employees more freedom to wow customers — they will almost certainly strike the wrong balance between customer delight and shareholder returns. The key to success in empowering frontline employees lies in giving them a framework within which to operate — and feedback about how they are performing within that framework. Take TD Bank, … [ Read more ]
Superquinn awards shoppers “goof points” for pointing out problems such as an out-of-stock item, a dirty floor or a checkout line longer than three people. The goof points, which provide discounts off future purchases, have proved a good way to get customers talking about their experience.
SAS Institute, the North Carolina–based software company, creates a “SASware Ballot” every year, giving customers a chance to vote … [ Read more ]
Change depends on the effectiveness of those providing the consequences – the sponsors of the change. But sponsorship is a cascading process and a “black hole” anywhere along the line will stop the change process below it. That’s why it’s essential to build a Sponsorship Spine from the bottom up. You can’t really appoint sponsors. You start by targeting the people who will need to … [ Read more ]
Every change initiative has its own unique risk profile. Bain has identified 30 specific risks that threaten to disrupt change efforts, things like poor sponsorship and change overload. These risks tend to occur with predictable patterns over the life cycle of a change. But only a handful of these risks determine success or failure at each stage. At the beginning of a change initiative, for … [ Read more ]
The CEO of a luxury goods company identified personal contact with his top staff as an important lever that would help move the business if he invested his discretionary time in it. “I always carry two documents with me,” he said. The first is a set of pictures of his direct reports and “every day I mentally ask myself, ‘Have I talked to these guys’? … [ Read more ]
In a downturn, some consumers and businesses cut back because they just don’t have the money to spend. Many more prospective customers have the money but feel uncertain about the future. Spooked consumers won’t buy more until they feel that it is safe to do so, or until they decide that prices have dropped as far as they’re going to. A company needs to understand … [ Read more ]
A useful tool to zero in on decision-making problems and create higher-yielding change programs is a decision management tool we call RAPID. The idea is to clearly map out who plays what role in each critical decision and use that to enable swift decisions, without endless debates, second-guessing or pocket vetoes. It determines the captain of the boat, so to speak, but in a more … [ Read more ]