Tag Archives: Chief Rational Optimist

Finding wisdom in a binary world

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Sometimes I think that the thirst for data, combined with a digital mindset, is reducing our analytical and critical thinking to a highly polarised, binary-driven view of the world.

Rather than recognizing that most ideas and concepts are composed in “technicolor” we are increasingly reducing our options, choices, responses and decisions to “black or white” conclusions. Everything has to be couched in terms of:

  • on/off
  • yes/no
  • true/false
  • positive/negative
  • for/against
  • like/dislike
  • friend/unfriend
  • connect/disconnect

It feels that our conditioning is driven by the need for certainty, the desire to be “right”, and the tendency to avoid disagreement/difference. However, uncertainty is more prevalent than we may like to admit. To illustrate what I mean, here are four personal learning experiences I would like to share by way of demonstrating that not everything can be reduced to black or white thinking:

1. The scenario is the same, but the context, therefore the answer,  is different

Although I was born and grew up in the UK, I completed part of my primary education in Australia. Before returning to the UK, I was required to complete the 11-plus exam, to determine which secondary school I would attend in England. (The exam was mainly designed to test literacy, numeracy and verbal reasoning.) Here’s a multiple choice question which I got “wrong”:

Q. Why do windows have shutters?

I chose “to keep out the sun” as my answer. In fact, the “correct” answer was “to keep out the wind”. The invigilator was kind enough to include a note to the examiners that my answer was based on the fact that I had been living in Australia, where window shutters are primarily designed to keep out the sun (and therefore the heat). Whereas in the UK, shutters are largely used as a protection against the wind.

2. The facts are the same, but the interpretation is different

While studying for my law degree, I had to write an essay on reforming the use and application of discretionary trusts, based on the current legislation and recent court cases. I argued in favour of an alternative approach to the relevant court decisions, and deliberately took a contrary view based on my social and political outlook at the time, and influenced by what I saw were changes in public policy.

To my great surprise, the tutor gave me one of my highest ever grades in that subject – even though she disagreed with my conclusions, she recognised that my reasoning was sound, and my interpretation was valid.

3. The intention may be “constructive”, but someone will always choose to see only the negative

Early in my career, I participated in a TV documentary series about different types of interview situations. As a local government officer, it was my role to advise members of the public on how to navigate the various regulations and policies in respect to accessing council services, as they related to their own particular circumstances.

One interview I conducted was included in the final broadcast. I thought my advice was objective, and based on widely accepted principles, but without advocating or recommending a specific course of action, as I believed it was my job to remain impartial yet factual. I later discovered that another local council used part of the same interview footage to train their own staff in how not to conduct an interview, because it could have been mis-interpreted as a way to get around the system. So, whereas I thought I was being constructive, someone in a position of authority chose to see it as a negative influence.

4. The assumptions may be reasonable, but the results often prove otherwise

Years later, I found myself having to defend a proposal to launch a smaller, and cheaper, version of a global product in a local market. The received wisdom among many of my colleagues was that the proposal would result in less revenue, even if customer numbers grew. As part of the initiative, I also advocated shutting down a legacy local product in the same market – partly to reduce production costs, and partly because very few customers were actually paying for this outdated service. Again, I faced resistance because a number of internal stakeholders thought customers would refuse to pay for a superior service, and that the business would end up alienating existing customers and, by extension, upsetting the local market.

Subject to a detailed customer migration plan, some very specific financial metrics and frequent status reports, the project was greenlighted. 12 months’ after implementation, the results were:

  • Comparable revenue was doubled
  • Overall production costs were halved
  • A significant number of new clients were signed up (including several from new market segments)

The closure of the legacy product did see the loss of some customers (about 10-15% of the legacy client base), but this was mostly non-paying business, and was more than offset by the increased revenue and customer growth. [In my experience, significant platform migrations and product upgrades can result in up to 20% of customers electing not to switch.]

What are we to conclude from this?

It’s totally understandable that businesses want to deal only with certainty (“just give me the facts…”) and often struggle to accommodate alternative or contrary perspectives. But despite the prevailing digital age of “ones and zeroes”, we are actually operating in a more fluid and diverse environment, where new business opportunities are going to be increasingly less obvious or come from non-traditional sources. While we may find comfort in sticking to core principles, we may end up missing out altogether if we are not prepared to adapt to changing circumstances: context is all about the difference between “data” and “knowledge”.

Wisdom comes from learning to acknowledge (and embrace) ambiguity; individuals, teams, organisations and businesses are more likely to benefit from greater diversity in their thinking, resulting in richer experiences and more beneficial outcomes.

 

2015 – A Year for Optimism?

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After a very challenging 2014, I am trying to face 2015 with a spirit of renewed rationalism and optimism. It won’t be easy, but if we can remain true to our real purpose, and (re)-connect with those things that bring us a sense of joy with the world, maybe we can get through it together. Now, more than ever, we need a Chief Rational Optimist…

 

Some gratuitous advice for customer service managers – 7 handy hints

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I make no apologies for the fact that this week’s post is something of a rant. But in venting my spleen I hope to offer some invaluable and sincere feedback to customer service managers everywhere.

Over recent weeks, I have had numerous phone conversations with front line customer service staff working for utilities, telcos and financial institutions. From my personal experience, these companies appear to be among the most frustrating companies to deal with, but my comments could equally apply to retailers, hotels, travel agents, software vendors, local governments or logistics companies.

Here are my suggestions on how customer service managers could improve their performance:

1. Train team members on the full product or service life-cycle – There is nothing worse than being passed off to a never-ending chain of “specialists”, people who know only their own few centimeters of the billing or fulfillment process (albeit their knowledge is probably several kilometers deep…). I am not saying they all have to be experts at everything, but having at least a common and consistent understanding of the end-to-end process would be a great start.

2. Update all team members on latest product and service changes on a timely basis – Following on from the above, I get really annoyed when given contradictory information from different client-facing employees, especially when the person I am speaking to is clearly not up-to-date with the company’s own offerings.

3. Tell the teams not to keep blaming the “system” – For one thing, the “system” is only as good as the humans who designed it. For another, the “system” is not some abstract or imaginary force over which nobody has any control. Often those designers are their colleagues. So in criticising the system for any shortcomings, the customer service representatives are in effect criticising their fellow employees and by extension, the company itself.

4. Listen to customer feedback relayed by the front line employees – For the most part, customers actually want to help service providers to do better. They don’t give their feedback so it can be ignored and disregarded – they would like it to be acknowledged, followed up and acted upon. No doubt most front-line employees would also like to think they are being taken seriously – but often I think there is an element of “shooting the messenger” which dissuades employees from raising genuine customer feedback and criticism with their managers.

5. Give customer service teams clear parameters to exercise their discretion – I understand that organizations require consistency, and they also expect adherence to operating guidelines and protocols. However, it gives me very little pleasure to have to go over the head of a front line employee to speak to a supervisor or team leader, who then ends up making their subordinate look ineffective because they have the “power” to reverse that erroneous charge on my bill. Rather than forcing customers to escalate issues in order to get attention from further up the chain of command, how about providing front line teams with more individual discretion as to how they can resolve customer complaints? I once heard of a major hotel chain that empowered front desk employees by granting them a program and quota of refunds, rewards, upgrades, discounts which they could allocate and award as they saw fit to address guest issues.

6. Learn to be more customer-centric, not product-led – So many service providers like to believe they focus on the customer. In fact, we know that customers are managed according to the products they purchase and the services they subscribe to. How often are internal systems jargon and inward-looking product terms used as a justification for a particular client outcome? To me, this demonstrates that many organizations are not interested in serving their customers – they are often rigidly organised around product processes and internal systems.

7. Don’t expect customers to train customer service staff (and certainly not for nothing) – Finally, we know that many organisations record in-bound customer calls. Sometimes, they bother to listen to the recordings. Occasionally, they might even contact the customer to seek more information. But rarely, if ever, do they contact their customers to say they listened, they heard and they did something about the issue. Sure, feel free to use my customer feedback for “staff training and coaching purposes”, but please give credit where credit is due. A voucher or a discount off my next bill would be a nice gesture!

While most retail markets are competitive, and customers have at least some choice between providers, the reality is that we all need access to gas, water, electricity, telecommunication and banking services. All of these sectors are highly regulated (and in some cases they also enjoy government protections), which by necessity reduces the amount of choice. Wouldn’t it be nice if these powerful and monopolistic companies used their enviable market position to benefit their customers, rather than taking them for granted?

Corporate Governance – exercising a “duty of awareness” in the age of social media

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Do we need a new theory of Corporate Governance? Is it time to look at a new model that reflects the current environment in which businesses operate, an era characterised by:

  • social media,
  • corporate and social responsibility,
  • shareholder and consumer activism,
  • increased market connectivity, and
  • rapid generational change?

Has the law fallen behind in being able to regulate and oversee contemporary corporate behaviour – where compliance with and adherence to the letter of the law may no longer be enough to meet community standards or satisfy shareholder expectations?

The question arose during a roundtable discussion I attended recently, comprising non-executive directors, entrepreneurs, corporate advisers and governance experts. Some of the issues we kicked around included:

  • the efficacy of running more frequent board interaction via the use of technology (as opposed to the standard face-to-face monthly board meeting);
  • the ethics of minimising cross-border taxation by multinational companies (even though it may be legal under international tax law);
  • the imperative to develop more inclusive and diversified boards (including networking into broader stakeholder groups);
  • the perils of ill-considered public comments made by CEOs (and the resulting social media backlash); and
  • the risk of harking back to some “golden age” of corporate behaviour (assuming such an era actually existed)

Our current perspectives on Corporate Governance largely derive from the late 1980s and early 1990s when a series of authoritative studies and reports led to new Codes of Practice and updated corporations laws – I’m referring to the work done by and in the name of Tricker, Carver, Monks, Cadbury, Greenbury, Hilmer and Hempel. And while in recent years we have seen increased scrutiny on CSR, directors’ remuneration and financial oversight by boards (plus Sarbanes-Oxley, Dodd-Frank and IFRS), the reality is that most of the earlier Corporate Governance reforms were introduced just as the internet went public and just as financial markets were being deregulated. So it could be argued that the reforms were ill-equipped for, or could not have anticipated, the changes to come – witness for example, the SEC’s recent approval of social media as an appropriate platform for corporate disclosure.

In Australia, Corporate Governance is described simply as “good decisions being made by the right person”, and the obligations of company directors are summarised as follows:

  • your primary duty is to the shareholders;
  • you must act with appropriate due care and diligence;
  • you must not allow the company to trade while insolvent;
  • you must exercise your powers in good faith and in the best interests of the company;
  • you must not improperly use your position of (or information obtained as) a director to benefit yourself or another person, or to cause detriment to the company.

On one level, the test of whether an organization has exercised good judgement in making a decision is, “would you be embarrassed if this was reported on the front page of tomorrow’s newspaper?” At another, Corporate Governance is reduced to a compliance checklist of risk mitigation measures.

The Australian courts (in the OneTel and Centro cases) have expanded and reinforced the duty of care (particularly in relation to the business judgement rule) to place greater accountability on individual directors to consider what a reasonable person would do in exercising their duty of care and diligence:

  • To understand the fundamentals of the business
  • To keep themselves informed of the company’s activities
  • To monitor the company’s activities (e.g., through active questioning)

The question we should be addressing is: “Does imposing a broad duty of care and specific fiduciary obligations ensure an appropriate level of Corporate Governance?” I would argue that in light of a rapidly changing operating environment, we would be well-advised to exercise a “duty of awareness” in respect of our Corporate Governance standards. In my view, directors need to take a wider perspective in understanding and monitoring the business fundamentals and the company’s activities. Some may argue that this is not a new duty, it has simply been forgotten in recent times – and in the era of social media, when it is far easier to “get caught out”, it would be prudent to have more regard for the broader context.

A “duty of awareness” offers an appropriate counter-balance to the numerous areas of self-regulation by industry sectors and by individual companies. It provides an objective test for assessing “if not, why not” explanations required under both voluntary and mandatory Codes of Practice – i.e., did the respondent take into account all relevant factors, and did the respondent adopt a sufficient level of awareness in evaluating its options under a chosen course of action?

The “duty of awareness” means that at an individual level, directors would be obliged to reflect on their contribution to and participation in board decisions; boards would need to consider the likely impact of their decisions on the company’s performance and on wider stakeholders; and companies would be expected to have regard to their standing as a good corporate citizen, not merely a compliant one.

Acknowledgements: I am grateful to Andrew Donovan of Thoughtpost Governance and Dale Simpson of Bravo Consulting Group for their invaluable contributions to this article.