Wednesday, January 4, 2023

Seven Ways for Corporations to be Ethical

Photo by Riccardo Annandale on Unsplash
I believe in a world where corporations can balance being good with being profitable. It's why I focus on Customer Experience for a living. But it's also undeniable that corporations frequently act to the detriment of customer health and safety.

What does it take for corporations to be ethical? Entire books are written about that, and I'm not going to definitively answer that question here, but I think it's a topic worthy of exploration with some obvious top-level solutions.

Leaders of companies often make customer-hostile decisions in countless ways, from tiny (like difficult return policies) to enormous (that harm people's wellbeing). Some of the largest ways corporations act to hurt people involve producing dangerous products, for example: 
We could make a much lengthier list of examples; in fact, the tobacco industry was so effective at obscuring the health dangers of smoking that today, other industries are said to take a page from their “playbook,” including energy companies, the NFL, alcohol companies, Facebook, vaping companies, and more.

I even see evidence of this same decision-making in today's corporate #COVID19 policies regarding work in offices, conferences, and store policies. It will take months to tabulate the data, but as of Fall 2022, COVID was on track to the third leading cause of death in the US for the third year in a row. We know COVID is mutating, that vaccine immunity is fading, and that COVID can cause longer-term chronic damage. There is no question that the world remains in the grip of an ongoing pandemic (with dangerous new variants rising at present.) So, why is virtually every company willingly permitting and urging risky activities and environments?

The argument seems to be that each employee or customer is informed and can make their own decision about COVID risks. But, if employers knowingly asked people to subject themselves to a chemical that was the third-leading cause of death, we would not consider that acceptable. And yet, corporate leaders are collaborating with employees and customers to continue exposing large numbers of people to a virus that continues to fill hospitals and is harming the economy.

I'm not here to criticize companies; my job is to help them. While the examples above may be greater in scale, are the drivers of these corporate decisions really that different from the self-interested decisions most people make every day?

We know that driving our car or taking a flight harms the environment. We also are aware that failing to wear a mask while in crowds lifts risks for everyone else. Yet, we do these and other things for personal finance, convenience, and social acceptance. So do companies. Upton Sinclair once said, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.” We'd all like to believe we'd make better decisions, but if we were executive leaders who find our profitable product harms people, how eager would we be to sacrifice our income, security, reputation, and job to rapidly abandon that product?

Which raises the question in the title of this post: What does it take for corporations to be ethical? There are things companies can do to be better, but in some respects, the answer starts with you (and me and everyone else.) As consumers, we need to hold brands to higher standards and realize every dollar we spend and minute we dedicate is a vote for the brand. (For example, after 13 years on Twitter, I've joined many others who made the personal decision to stop participating on the platform.) And, as voters, we should consider the role of government oversight in regulating the safety of our products (be that the mental health implications of social media, the security of our financial systems, the safety of the cars we drive, the long-term impact of or the energy we produce, or the dangers of products on store shelves.) Some believe in “laissez-faire” corporate policies, but I believe history tells us our economic, financial and public health are greater with the proper level of government oversight and corporate participation.

Within corporations, there are many things we can do to improve ethical, employee- and customer-centric decisions: 
  • Strive for greater transparency, collaboration, and employee empowerment: It helps to improve the transparency of information and how decisions are made. This means allowing people both inside and outside the organization to raise concerns without fear of retaliation. It also means sharing more information, both inside and outside the organization. Reporting, for example, on your DEI initiatives is one way to bring light to your corporate actions and values. It is much harder to make dubious decisions when more people are informed and involved.
  • Commit to improved customer listening: The more you listen to your customers and understand their needs and perceptions, the easier it is to make customer-centric decisions. Too many companies collect and then largely ignore the voice of their customers. Make it a priority to listen and emphasize the needs and expectations of your customers in important decisions.
  • Focus on corporate reputation and long-term success: Short-term focus can kill companies. Decisions made to drive today's revenue and profit at the expense of an organization's reputation or long-term success shortens the lifespan of corporations. Boards and leaders must consider the ways in which leader performance is measured and rewarded to be sure top-level decisions are made with an eye toward the future and not just this year's stock performance.
  • Define and reinforce corporate values: Many organizations have values, but fewer live by them. Make sure your values aren't something locked (and forgotten) in employee handbooks, but are ever-present and repeatedly reinforced expectations to which employees and leaders hold themselves accountable. Promote examples of times when leaders or employees rely on your values to make decisions that might have seemed wrong had only short-term financial concerns been considered.
  • Consider ethical employee recognition and rewards: Too often, virtually all employee performance and rewards are based around short-term financial goals of efficiency, cost savings, and immediate success. You don't encourage ethical behaviors by demanding one thing of employees and then rewarding another. Consider ways to balance your performance appraisals, promotions, and incentive programs so that people are encouraged to make decisions aligned with your values and not just dollars.
  • Model ethical behaviors: There is no substitute for top-down ethics in an organization. Everyone watches and repeats the way leaders behave because they believe that is what is expected, what's accepted, and what gets them promoted. Too many leaders think they lead with words and policies when, in fact, every leader (great and terrible) leads by the example they demonstrate in their daily interactions throughout the organization.
  • Be open about mistakes and missteps. Finally, it's important for ethical organizations to learn, and there's no way to do that if people feel they must hide mistakes or deflect blame. Many leaders talk a good game about embracing failure, but many employees fear that mistakes, if acknowledged, will become a “can tied their tail.” If we allow people to think they must be perfect, or they'll sacrifice their reputations and careers, we encourage dishonesty and self-interest.
As consumers, can demand more of the brands we buy (and don't buy). And as employees and leaders, we can implement the processes that encourage ethical actions and model the behaviors we expect of others. But will we? That's up to you.

Wednesday, December 28, 2022

Personal and Professional Goals: How Our Quest for ROI Destroys ROI

Photo by S O C I A L . C U T on Unsplash

I just reached a personal milestone, and the experience has caused me to think a bit about the measurement of ROI and how we use KPIS, goals, metrics, and OKRs in business.

This past weekend, I achieved something I would've thought impossible: I've completed a high-intensity workout every single day for two straight years. It's not a long exercise regimen--it started as 7.5 minutes and has grown to 15 minutes each day--but it kicks my butt every morning. I feel great--fitter and healthier than I have in decades. I've also lost about 45 pounds (20 kg) in those two years. It's the “also” in that last sentence that is worthy of exploration in a discussion of personal and professional goals and ROI.

The Differences Between the Personal Goals You Control and the Outcomes You Influence (and Some Advice for Your New Year's Resolutions)

I didn't set out to lose weight. I hoped I would, of course. But I really started this daily regimen to be healthier. I was turning 60 soon, my doctor was voicing a few health concerns, and in the first winter of COVID, I worried isolation and diminished social behaviors would decrease my already sedentary level of activity.

So, I set my goal to work out every day--not to look better or lose weight, just to work out. I goaled my activity, not the outcome, because I control the activity but only influence the outcome. If I failed to do my workout every day, that's on me and only me. But if I worked out every day and failed to lose weight, that is not. (Or, at least, it's a much more complex and chaotic question, dependent on activity, caloric intake, metabolism, and other factors.)

The vital question is this: If I exercised every single day but didn't lose any weight, would that render the exercise valueless? Of course not. Had I not lost a single pound, I'd still be stronger, firmer, and healthier. Is there any doubt that working out regularly is good for us?

Had I set my goal on weight loss, I would've given up. After four months, I had gained three pounds. That could've been a decision point, but it was not, because losing weight was an outcome, not the objective. If it gave me any pause, it was to wonder how much more I might have gained had I failed to achieve my activity goal.

Some of you are about to embark on a New Year's resolution, and I cannot recommend strongly enough that you set your goal on the activity, not the outcome. It's okay to hope for or be confident in the impact, but your goal--the only thing you really control--must be to run five times a week, get to the gym three times a week, or exercise every day.

(This works just as well for other New Year's resolutions: Want to learn a language? That's just the outcome; the goal is to complete an online language lesson four times a week. Which, coincidentally, is another goal of mine. Aprendo espaƱol. Completo cuatro lecciones cada semana en Babbel.)

The Difference Between the Business Goals You Control and the Outcomes You Influence

Which brings me to how we conduct business. I work in Customer Experience, and every single week, someone asks me to specify the ROI of CX. The discipline of CX requires organizations to listen more to customers, gather data about customer perception and experiences, and act on that information to strengthen relationships.

Is there any doubt that doing those activities is good for our businesses? Is there any conceivable advantage to ignoring customers' wants, needs, and perceptions? And if you constantly committed to those CX activities and improved customer satisfaction but were unable to calculate the ROI, would that make that effort wasted?

Of course, these questions pertain to more than just CX. Another question my peers and I are asked every single week is the ROI of digital transformation. What is the alternative? We live in a world with the Internet, mobile phones, and smart devices. The average US household owns over ten connected devices, and the average number of connected devices per employee has risen to 4.9. Does your organization believe there may be financial rewards to returning to typewriters, landlines, file cabinets, and interoffice envelopes?!

I understand there's an important and valuable query hiding behind these ROI questions: It's not, “Is there ROI?” Or even, “What's the ROI?” The question is, “How will I know I'm making the right investments?” That's a reasonable question, but we must realize that the benefits won't be expressed in just dollars, just as the value of exercising isn't merely measured in pounds. We must understand the worth of the activity and not just the demonstrable, attributable return on investment we can measure.

If I stopped working out after four months because I gained weight, we can all agree I would be less healthy and feel worse today. And, I hope, we would all concur that if an organization stopped listening and acting on customer feedback or ceased their efforts to transform for our digital world, that would be very damaging to the company. Yet, how many companies will cut budget for CX in 2023 or invest half what they should in technology because they are unable to quantify the ROI?

Start With Why

The secret to tackling these personal and professional challenges is to start with why we need or want them in the first place. If we do so, we'll stop treating every investment of time and money as if it's an ROI decision and start recognizing unique and necessary ways of measuring impact.

Decisions that are short-term in nature and made to derive financial outcomes should be driven by ROI. If you can invest $500,000 to save $1,500,000 of costs over three years, that's a good investment. If an e-commerce company can invest $250,000 in a direct-response ad campaign to generate $1.5 million of sales and $500,000 of gross margin, that's a good investment.

But the “why” behind the most complex corporate decisions is not simply to return an immediate and measurable profit. Why invest in CX? Because poor experience degrades your reputation, harms loyalty, increases churn, raises costs to serve, harms inbound traffic and conversion rate, and lowers lifetime value. Very few of those costs (or benefits) will be directly attributable, nor will be they be immediate. That means we can seek the ROI business case of CX, but we shouldn't be limited by it because we recognize much of the benefit accrues over time and is not ascribable to any single project or investment.

Why invest in digital transformation? Because it's how business is conducted today, and the pace of change is only accelerating. Companies that fail to secure and use essential tech lower productivity, provide poor customer experiences, miss sales and service opportunities, collaborate badly, frustrate and churn employees, diminish reputation, and raise costs. Again, some of those things can be measured in dollars and cents, but trying to attach a short-term, traceable ROI to every digital investment is the road to madness.

Every leader wants their company to be Apple and Amazon, but no leader wants to risk being Jeff Bezos, Tim Cook, or Steve Jobs. Those leaders did not make every decision based on a spreadsheet. They made big bets on CX and digital transformation knowing some would fail and the ROI was neither immediate nor attributable.

In 2013, Jeff Bezos said, “We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.” Tim Cook reportedly told an analyst, “If you want me to do things only for ROI reasons, you should get out of this stock.” In 1997, Steve Jobs said, “As we have tried to come up with a strategy and a vision for Apple, it started with what incredible benefits could we give to the customer? Where could we take the customers?”

Those are leaders who knew they needed to make investments for the future, regardless of the ROI of each decision along the journey. They knew focusing on the customer and investing in the right tech was essential, not because they could calculate the return, but because there was no other way to realize their vision.

Must someone prove to you there is ROI to listening to customers and improving their experiences? Do you need a spreadsheet to tell you the return of using the tech you need to run your business, be responsive to customers, and keep up with competitors? What if, instead, you took the lead of the most successful leaders of the past three decades and made your goal doing right by customers? Then, much like my weight loss, you may find the financial rewards were never really the goal, but merely the expected consequence of doing the right thing.

Friday, December 16, 2022

Fight FOMO: Customer Experience Non-Trends for 2023

Photo by Usman Yousaf on Unsplash
'Tis the season for consultants and experts to create FOMO. “Here are the hot new trends,” they post, sharing things you're not doing. “Do this or suffer the consequences,” they'll say. And, coincidentally, those same people and their employers are more than happy to help you adopt these hot new trends--for a price.

Do you ever go back and look at all those annual FOMO articles to see how they aged? Do you have any idea how many years people have been declaring each year the year of blockchain, NFTs, or cryptocurrency? And, has any company actually suffered for not having a blockchain, NFT, or crypto offering? (I searched Google for “the year of blockchain,” and quickly found people saying every year since 2015 was going to be the year of blockchain. Narrator: None of them were the year of blockchain.)

As I review the stream of #CustomerExperience predictions for 2023, what I see is not constructive advice but the same, old fear-building tactics to convince leaders their brands will fail because they don't move quickly. For some reason, it's lost on many that Facebook wasn't an early social media mover, Android considerably trailed Blackberry and Palm, and the share of ridesharing owned by taxis continues to fall relative to Uber and Lyft despite taxis having a 400-year head start (dating back to the first horse-drawn for-hire hackney carriage service in 1605.) The benefits of first-mover advantage have been wildly overstated. The winner is the brand that gets something right for the most number of customers, not the first one to sacrifice their budgets for others' education of untested platforms and technologies.

What are the non-trends writers are pushing this year?

Non-Trend #1: The Metaverse: Listen to the hypesters and you'd think everyone in the world is clamoring to live their personal and professional lives as avatars in a virtual world. (In case you haven't noticed, in science fiction and media, the idea of living our lives in a virtual world is almost always the basis for a horror, thriller, or post-apocalyptic tale and not an upbeat comedy.) So, how's the metaverse working so far? Well, the European Union just threw a metaverse rave at a cost of €387,000 and six people showed up. Meta has cut 13% of its staff because its metaverse bets aren't paying off. And Mark Zuckerberg, the metaverse's biggest cheerleader, has said he expects the metaverse investments to take about a decade to bear fruit. So, let me assure you that 2023 will not be a year when your brand loses out if it's not in the metaverse. Go ahead and test it, pilot ideas, and explore the metaverse; just don't call it a hot or vital #CX trend for the coming year.

Non-Trend #2: Immersive tech: It amazes me to see people pushing VR (virtual reality) and AR (augmented reality) each and every year. These technologies certainly hold some longer-term promise, but honestly, do you know anyone who owns and regularly uses a VR or AR headset? A Forbes contributor said this month that “immersive AR and VR experiences will become the norm in 2023,” and let me assure you with complete confidence that is nowhere near true. Sales of VR devices actually fell this year, although new products from Sony and Meta are expected to push sales back up in 2023. And the thing almost everyone seems to miss (or obscure) is that the eventual growth of VR headsets will be driven not by consumers wishing to work and shop via VR or AR devices but by gamers. The top use for VR headsets right now is gaming (92%), and there's a gigantic gap to the second and third-most popular uses, exploring new places (29%) and watching movies and TV (25%). (What you don't see on the list: Shopping, working, and other immersive tech use cases people claim will be hot trends.) VR games will grow in the years ahead, but don't expect the same consumers who ignore your Facebook posts or skip your ads to race to engage with your brand using their VR or AR headset.

Non-Trend #3: Personalization: This one makes my list for a different reason than the others. Personalization isn't a hot new trend for 2023 because it's neither hot nor new. Personalization strategies and platforms have been with us for a decade now. My guess is that your company already has technology in place to personalize emails, websites and mobile apps. If you're like most, you struggle to gather the data necessary to make personalization meaningful. How bad are those struggles? Gartner predicts that by 2025, 80% of marketers who have invested in personalization will abandon their efforts due to lack of ROI, the perils of customer data management or both. Your brand should strive to get personalization right--meaning right for customers, not just for your brand. But the reason to focus on personalization isn't that it's a hot, new thing but that it's an established and maturing capability deserving of some serious and rigorous attention.

So, what are the hot trends in CX? From my perspective, they vary widely by category, brand, and an organization's level of maturity. For some, the hot CX trend is to simply deploy the right listening strategies to better understand evolving customer needs. For others, it's to tap the enormous value of their existing VoC feedback, customer data, and past research to create greater impact. In other organizations, this year's trend is to convert the CX program from a disconnected collection of siloed efforts into an effective and sustainable cross-functional program. And for others, 2023 will be the year to abandon generic one-size-fits-all customer journey maps and develop more powerful persona-based journeys.

People have come to expect cutting-edge technology and sexy new business models as part of annual trend predictions. We'll certainly see chatbots improve in 2023. Predictive analytics will get better. The use of interaction analytics to understand customers will certainly grow. Without any doubt, more companies will attempt to deflect customer call volumes by offering self-service (and a couple of them may actually get it right.)

But none of that works if you don't listen to customers, understand their needs, solve their problems, strengthen their relationships, and collaborate cross-functionally to tear down the silos that cause disconnected customer experiences. So, the hot new CX trend this year and every year won't be a new NFT or blockchain technology or the next DTC or subscription model; it'll be getting the basics of CX right to encourage a customer-centric culture that impacts the day-to-day decisions of every employee from the C-suite to your front lines.