What’s the Purpose of Data, if it Doesn’t Lead to Insights?

Let me start by noting that I rent a lot of cars each year for business. It is unlikely anyone rents many more cars than I do. Thus one would expect that I am a valuable customer to the rental car company I use most. That was Hertz. The operative word is … was.

For the second time in 20 years I have stopped renting any cars from Hertz, except to use up my points where I get the car effectively free. Several years ago I stopped the first time, for reasons that don’t matter for this post. Hertz never seemed to notice. Eventually a Hertz exec in an audience I was speaking to heard me tell the unbelievable customer service story that caused me to stop, and he came up to ask how he could make it right. That fixed things, until about 6 months ago when I stopped again. For a different reason, that again doesn’t matter for this post.

I continue to get a few e-mails a week from Hertz telling me about all the great promotions they have going on etc. However, I have yet to get an email asking me why I went from several rental car days a week to ZERO. You know Hertz has a mountain of data on rental frequency, locations, preferences etc. And yet, despite the fact that I am one of their better customers, they don’t seem to know, or care that I have left them.

What good is data on “loyal” customers if you don’t use it to get insights about changes in their behavior that might reflect needs on their part? Data collection may just be an exercise in math not for insights. At least at Hertz.

Mitch

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What’s Really Wrong With United Airlines?

Over the last 15 months or so United Airlines has received a lot of well deserved negative publicity. Here is a partial list:

• In January of 2017 they were blamed for killing a passenger’s Golden Retriever dog because it didn’t fit on a flight the passenger was told it would fit on, and then had to stay in containment for 20 hours.
• In April of 2017 United famously, physically removed a passenger from a flight after the passenger refused to give up his seat for the benefit of a crew member.
• Also, in April, Simon the rabbit died on a United flight and the post-mortem handling was a circus (which is an insult to circuses).
• And again, in April (clearly not a good month) A French-speaking passenger was put on a flight to San Francisco while actually holding a ticket to fly to Paris, which was her intention. (Seems a security issue that allows an un-ticketed passenger on a flight)
• In June, a 2-year old’s seat was given to a stand-by passenger and her mom was afraid to complain based on United’s history, so the child flew in her lap instead.
• And then this week we find out that United killed a passenger’s dog by forcing it to fly in the overhead bin. (Seriously, who is that stupid?)
• United had the most animal deaths in 2017, 18 in total.

While each of these events has created a firestorm for United, my question is: What is the root cause of this and other behaviors that seem to defy logic or common sense?

I submit it is the CEO, Oscar Munoz, who has allowed or created a culture of passengers being an inconvenience to the efficient movement of airplanes. Mr. Munoz has been a Board member of United and Continental (before its merger with United) for many years.

He was named Communicator of the Year (why is unclear) in March of 2017 by what is either an inept publication, or one that gives awards based on money. Note that in April (one month later) their PR nightmares, including dragging a passenger off the plane, began and United’s responses were bad, to put it politely.

Why is Mr. Munoz still CEO of United? (To be fair the Board stopped their plan to make him Chairman as well.) Who has been fired for these fiascos? What is wrong with the culture of an airline that can create and allow this pattern of behavior? When Jan Carlzon became CEO of the world’s worst airline (at that time), SAS, in 1981, he turned it around by creating a “moments of truth” culture and enforcing it. Has Mr. Munoz either exacerbated a dysfunctional culture or created one that is not customer-centric or even remotely interested in the customer?

Mr. Munoz has either fostered, encouraged or allowed a culture where “using your good judgement at all times” (the primary policy of Nordstrom’s which drove it to greatness) is clearly not the plan. Or hiring people based on their bad judgement tendencies is the plan.

In reality, I blame the Board of Directors for not having replaced Mr. Munoz already. And maybe the shareholders for not replacing the Board. Fortunately (for United), the airline industry is strong and the number of airlines is limited so United can probably get away with this behavior without going bankrupt … again. But then who would really want to work at such a place?

This won’t stop until Munoz is gone, and he won’t be gone until the Board acts. And the Board, like many, doesn’t seem to be focused on the longer-term issues that face their company. That’s what’s really wrong with United Airlines, in my opinion.

Mitch

What Is Marketing … Really?

Thrilled to note that Vistage Florida posted my thoughts on this topic.

Mitch

The Danger of Automated Processes

In an effort to increase efficiency, many companies are automating customer experience processes; resulting in unintended problems with effectiveness. I experienced this first hand recently with the Ford Motor Company.

I’ve been a fan of Ford since they didn’t take Government money during the so-called, Great Recession. I’ve also found their products to be above average. Unfortunately, I recently learned they seem to have a policy to not stock parts for cars more than five years old. This can make service for “older” cars problematic. Without the need to go into details, it recently took seven weeks for one of our cars to be repaired all due to waiting for parts.

This process caused me to get to know, all too well, most of the people in parts and service at my local Ford dealer. While much of the problem in getting the car fixed was due to process point hand-offs (not unusual in larger companies), it was a recognized “circus” by all involved. The car was finally repaired and appears to run fine. The service advisor apologized many times during the process.

However, about a week after we got the car back, the dealer and/or Ford sent me what I assume were automated emails. The first was from Ford Shoptalk soliciting my feedback on the service I received. The second question in the survey forced me to classify myself as a repair shop or a fleet owner. I am neither, so I stopped filling it out as “none of the above” was not an accepted answer.

The second came from either the dealer or Ford on behalf of my service advisor. It was clearly a pre-written email thanking me for being a customer. Given the disaster of a time we had with the dealer and the service, it was not only inappropriate, it was annoying as it demonstrated that nobody cares, it was just sent. This is an example of an automated process that actually had the opposite effect as the one desired.

What automated processes are you using that make you “efficient” but show your customer that you don’t really care? How efficient do you want to be at alienating your customers?

Mitch

Go Green

I recently checked into the Marriott Madison East and was staying for two nights. At check-in the front desk clerk asked me if I’d like to “go green?” I said I didn’t know what that was. She took many words to explain it meant that my room would not be cleaned while I was at the hotel. The idea being that sheets and towels would not be changed-out thus saving the environment. They implemented it by simply not sending housekeeping to your room.

I would have been happy to reuse the towels and sheets, but wanted the room straightened up and the bed made, so I said no thank you.

I was struck by the fact that the program was called “go green” to leverage the idea that you can save the environment. Good name, bad implementation in my view; unless the goal is to cut the cost of housekeeping without offering a discount.

Mitch

Can Your Culture Make Your Company More Innovative?

Well sure, but the issue for many is whether a company needs to change its culture to become more innovative. Much has been written on this topic over the last few decades as the idea of innovation as a driver of competitive value comes in and out of vogue. (To be fair, it is never really out of favor, just not necessarily the idea du jour).

In the 1980s to be innovative one needed to emulate 3M. In the early part of this century the seers suggested you emulate Apple. The problem is both companies have historically been innovators, but they do it very differently. If you attempt to emulate both, you will fail, and if you attempt to emulate something your culture won’t support, you will fail.

What appears to be solid research published a few years back supports an observation I have made over the years (thus I support the research results), and that is that there is more than one way to be an innovative company. Further, I believe that trying to do it other than “your” way will not produce useful results.

It is extremely difficult, if not nearly impossible, to change the culture of a company without changing a substantial number of the people who work in the company. This is impractical for most companies, so unless the culture of your company is anti-innovative, changing the culture should be your last option. The question then is how do you leverage your existing culture to be more innovative.

In their Harvard Business Review article, Wunker and Pohle note from their research that there are four distinct innovation archetypes that produce effective innovation. Further they note that one is not “better” than another. This suggests that your company should select the archetype that most closely aligns with your culture.

The first archetype is the Marketplace of Ideas. This is the approach used by 3M and Google. In this archetype people are free to explore ideas that may be helpful to the company and to use 10%-15% of their time in exploring these ideas. Ideas are presented to decision committees and those committees select the ideas that will be further funded. Just because an idea is rejected does not doom it and the idea champion can continue to work on it (albeit with limited funding) in an attempt to gain support. Post It Notes were famously developed this way. W.L. Gore is an extreme example of this archetype. The key here is that the innovation driver is bottom up, not top down.

The second archetype is the Visionary Leader. Apple has used this archetype since its inception. In this approach the team executes on the leader’s ideas. It is incumbent upon the leader to realistically understand what the company is capable of doing well.

The third archetype is Systematic Innovation. This approach is used by many companies and is the core approach taught by Eureka Ranch. In this approach innovations are focused in support of the company’s strategy and will be incremental, significant or breakthrough in nature depending on the strategy of the company. This approach is top down as opposed to the Marketplace of Ideas, which is bottom up.

The last archetype is the Collaborative approach. In this model, innovations are created by using outside partners. The movie industry uses this approach for most of its innovations. The major studios obtain innovative products from outside developers. Some of the more recent studios such as Lucas Films and Dreamworks do not use this approach. The Spin Toothbrush from Crest (Proctor and Gamble) was developed outside of the company using this approach. The success of this approach requires access to and partnership with innovators outside your company, and that you not have an NIH (Not Invented Here) culture in your company.

When I present these archetypes as part of my presentation, Managing For innovation, some executives ask if they can be a mix of two of these approaches. My response is not and be successfully innovative. Each of these approaches requires a distinctly a different culture and it is likely your culture is better aligned with one than the others. Figure out which one that is and then learn to implement that archetype excellently.

Mitch

Up Yours: How To Sell At Higher Prices

I’m excited to announce my new e-book on pricing. In a series of 22 short chapters I show you how others have successfully used effective strategies to sell at higher prices. Studies by Harvard and McKinsey prove that the most effective way to increase profits is not by cutting costs, but rather by raising prices.

Many of us are reluctant to do that; usually because we believe that raising prices will cost us lost sales that may be more than the increase in prices generate. The examples in this book can help you see differently what you can do to increase your bottom line.

And, it’s only $4.99 in the Amazon Kindle store.

Mitch