Category Archives: Organizational Behavior
Just when you thought you knew all you needed to know about strategic planning, Tennessee Bank & Trust hosts a round-table discussion with experienced business leaders that will remind you how much you have forgotten and why you need to think about your strategic plan all year long.
There are great nuggets here. What is your top piece of advice about strategic planning?
When we launched our company blog in 2009 my first post was about customer service. I recounted a personal experience at a local hospital as an example of bad customer service. Since our firm specializes in healthcare, and I’ve helped execute customer service programs in hospitals throughout the country, I had a thorough understanding of the importance of a positive patient experience.
This is why I was so intrigued by an email I recently received from Catalyst Healthcare Research that provided findings from a study they conducted in partnership with The Beryl Institute. The study was called The State of Patient Experience in American Hospitals. The purpose of the study was to determine “if hospitals are now being reimbursed for quality patient care and a positive patient experience, what are they doing to improve it?”
According to more than 1,000 executive leaders at hospitals throughout the country, roughly 70 percent said their number one priority in the next three years is patient experience/satisfaction, closely followed by patient safety.
When asked about the key elements of their patient experience efforts, the top responses were that they share patient satisfaction scores throughout the organization and they encourage regular rounding by clinical staff as well as the hospital leadership team. Since transparency is often key to helping employees feel engaged with the overall mission of the organization, it’s no wonder sharing satisfaction scores topped the list. If employees don’t understand how you’re performing and how that translates to the bottom line, it’s often difficult to build a “team” mentality.
To monitor patient satisfaction performance, respondents said they rely on various metrics, but the three most popular were HCAHPS scores (86%), patient survey findings (80%) and discharge follow up calls (70%). From a patient perspective, I think the most interesting question was how hospitals plan to further improve the patient experience. I was intrigued because the answers prove hospitals really understand customer service is important. Answers included reducing noise, more physician rounding, improved cleanliness, increased physician communication, better food service and more attention to pain management.
Approximately 70 percent of the respondents felt positive about their efforts to improve patient satisfaction, and we can only hope this is an accurate representation of hospitals across the country. Starting in 2014, the hospital Value-Based Purchasing program will tie at least 1.25 percent of hospital payments to their performance on various quality and patient experience indicators. So, what does this mean? According to a recent article in Becker’s Hospital Review, the financial impact will be significant on low performing hospitals. The article provided the example of a 300-bed hospital with poor quality metrics that would be penalized approximately $1.3 million a year, beginning in 2015.
This study proves hospitals are putting a great deal of importance on patient satisfaction. Fingers crossed it is enough.
As a professional with extensive experience in international mergers and acquisitions, I often hear that mergers and acquisitions rarely live up to the original intent behind the deal. Bain & Company recently published a report of their findings from research they conducted on M&A activity from 2000 to 2010, and they found that companies that pursued mergers and acquisitions as part of their growth strategy outpaced the growth of companies that did not. Most interestingly, companies with more aggressive M&A strategies outperformed companies with moderate M&A activity.
Negative sentiment toward M&A is largely framed by the big failures – like the AOL and Time Warner merger, the largest merger in corporate history. (At the time of that merger, I was working with Vodafone, based in the U.K., on their hostile bid for Mannesmann in Germany, an acquisition also discussed as the largest merger on record. With AOL Time Warner’s friendly announcement, the Vodafone Mannesmann merger which followed soon thereafter became the largest hostile bid on record.) The reasons for failed mergers are many, but in my experience, successful integration of the merged companies poses one of the greatest obstacles to success.
Companies generally do a very good job of defining the rationale for an M&A deal and conducting the required due diligence to ensure the right fit. Unfortunately, after investing substantial money, time, and energy into making the deal happen, management teams often fail to plan adequately for assimilating the two corporate cultures into a new cohesive unit. Constructive integration is doable, and management teams can plan ahead for a successful M&A outcome:
1) Assign a dedicated team focused exclusively on the tasks following the announcement. As an extension of the due diligence team and within the dictates of regulatory guidelines related to the industry and the specific transaction, this integration team should be appointed as soon as management begins its due diligence so that the team has ample time to develop a comprehensive integration plan. You might think this timing is premature given that so many deals don’t make it through the due-diligence process. But companies lose valuable time and momentum when they wait until the closing of the deal. One critical mistake in the integration process: management teams spend too much time trying to find the answers to very important questions after the deal is signed when they should be executing decisions made far in advance.
2) Define how the merged company will look in six months and in one year, and then develop the action plan that will get you there. Companies have very specific objectives with each merger or acquisition. Make sure the merged company stays true to those objectives, and consider the impact those objectives will have on every business unit, employee, and customer, and be aware of the changes that will have to occur to reach the six-month and one-year corporate vision.
3) Test the action plan to ensure that it matches the original rationale and objectives of the merger. Make sure you consider all scenarios and outcomes. Integration teams can reduce the risk of failure when they identify the pitfalls before they happen.
4) Consider your audiences. Employees, customers, and business partners have firm loyalties, and a merged company must develop strategies to win these individuals and groups over to a new corporate culture and brand.
5) Develop effective messaging. Just because you understand the rationale of the merger doesn’t mean everyone else does. Each audience has unique motivators that bring them to the brand. Some of these motivators are rational and some are emotional. Effective messaging will be consistent across all groups, but it will also be specific to address the motivators of each group.
Change is hard. Even though the benefits of the merger or acquisition are real, employees will have adjustments to make and new relationships to build. Customers may be asked to embrace a new, or at least modified, brand despite the fact that they love the old one. Business partners may question their relevance in the newly merged entity. These are just some of the audiences. Integration strategy plans for all these scenarios – and many more! It is about more than announcing the deal in an email. A successful integration plan brings people together as a team to appreciate the value of the newly merged or acquired company.
M&A can bring dynamic opportunities to a company: expanded markets, diverse customers, innovative technologies, and new products. Companies need not fear M&A activity as long as management understands the merger is not completed with the announcement or closing of the deal. The real work has just begun. With appropriate advance planning and timely implementation of the integration plan, companies can improve their competitive strength with sales growth, profit growth, and shareholder value.
If there are any silver linings in the wake of natural disasters like the tornadoes that devastated Moore, Okla., this week, they often come in the form of community and organizational responses. Time and again, people and companies demonstrate support and empathy for the victims of disastrous events by opening their hearts – and their wallets – to help others rebuild.
CBS Monday pulled its season finale of the sitcom “Mike & Molly” because the plot involved a tornado strike set in the couple’s home of Chicago. Recognizing the inappropriateness of the episode in the context of the afternoon’s tragic events, acting quickly to reschedule its programming was a smart and thoughtful move by CBS.
Lovell client Walmart pledged $1 million for the Oklahoma recover in donations of cash and materials, including truckloads of food, water and other basic items. The company also sent associates from surrounding states to work in its stores in the affected area so Oklahoma associates could be with their families.
Verizon set up a mobile command center in Moore offering emergency phones and charging stations, while the Home Depot in Moore became a shelter for homeless pets, CNN reported.
And Oklahoma Governor Mary Fallin, speaking to the members of the press Tuesday about the state’s disaster response, announced that state employees who had lost homes or loved ones would receive 15 days of administrative leave to take care of personal needs and begin to get back on their feet. In a litany of expressions of gratitude and appreciation, Fallin also included a gracious thank you to the media for their assistance in providing information about weather, disaster resources, and search and rescue efforts.
In the last two months, we’ve seen two immense tragedies in the Boston bombings and Moore tornados, but we’ve also witnessed remarkable responses on both personal and organizational levels. What silver linings gave you hope this month?
I recently had the good fortune to experience a magical few days in Disney World. Though I spent most of my time enjoying the parks as my six-year old did, I could not help but notice how thoughtfully and thoroughly the Disney Company does its job. If ever there was an enduring – perhaps, indestructible – brand, it’s Disney.
That kind of success and endurance does not occur by accident. The culture of Disney was clearly set in stone (or castle rock) by its founders and has been protected and carefully enhanced ever since. I’m certainly not the first to be struck by Disney’s operating style and culture – countless business books have been written about the company over the years. But below are one small business person’s takeaways from a five-day immersion in the Disney experience.
Exceed expectations. Disney prides itself on over delivering and delighting customers. If an employee (who the Disney company refers to as a “cast member”) learns you are visiting the parks for the first time, you will be given a “First Time” button. And if you wear that button, you are likely to receive not only kind words and warm greetings, but extra scoops of ice cream on your cone or free stickers as you wait in line for a ride. When my husband commented on how much he enjoyed the raspberry sorbet in Cinderella’s castle, our server appeared with an extra serving in a to-go cup (which served as a great distraction from the bill he was signing at that moment). Are your employees encouraged to look for ways to exceed customer expectations? Is your leadership setting the example to do so?
Make it personal. Cast members say “Welcome home,” every time a guest walks into a hotel. While it may feel a bit saccharine or presumptuous to the curmudgeonly visitor, by the third or fourth reference, you really start to believe it – and you do feel at home. Who wouldn’t want to live in the most magical place on earth?
Own every mistake. If something goes wrong with a food order or during a ride, cast members are quick to acknowledge the problem, apologize for the inconvenience and offer some small reparation, such as a fast pass (to skip lines on a ride) or a Mickey trinket. The folks at Disney know that large crowds + hot weather + bad service = recipe for disaster. Cast members cannot control the weather and they welcome the crowds, so they do everything in their power to ensure that your experience is pleasant and your irritations are minimized. Is your company quick to acknowledge customer concerns and address them? Are your employees empowered to do so?
Protect the brand (and propagate it wildly). Disney is famous for fighting to preserve and protect its greatest asset – the Disney brand and everything it encompasses. You don’t find the Disney mark stretched out or misrepresented in weird colors and crazy fonts. And by and large, toys, apparel and even cultural experiences (think “Lion King” or “Beauty and the Beast”) are high quality products that are well marketed across all types of consumer goods. I happen to be a Perry the Platypus fan – you wouldn’t believe how much Perry paraphernalia is available! Are you cross selling your services and leveraging your business investments creatively?
I know. I sound like a crazed mom who had a little too much Disney cool aid on spring break. That may be true – my family had a wondrous vacation and I’m grateful. But as we rode the monorail one night after a parade in the Magic Kingdom, I pulled out my iPhone to look at the historical performance of Disney stock (NYSE:DIS) against the Dow and decided these folks know a thing or two about how to run a business over time.
Have you adopted any Disney principles in your small or large business?
“What are you thinking over there? You’re awfully quiet,” a client once said to me. It felt more like an accusation than an observation. We were midway through a strategy session on a new product and I had been listening intently as the sales team shared information – much of which I was hearing for the first time. Aside from asking a few questions, I hadn’t interrupted, interjected or otherwise hijacked the conversation to share half-baked recommendations or serve my own agenda. Was that wrong? I didn’t think so but, at that moment, it sure felt like it.
Being an introvert in what often seems like a world of extroverts can be tough. Quiet, thoughtful reflection is often mistaken as shyness or disinterest. It’s especially difficult in fields like marketing, sales or even public relations, which tend to attract extroverts. (I’ll never forget taking the D.I.S.C. personality test in a roomful of hospital marketing directors a few years ago and being the only “analyzer” in a room full of “promoters.”) Right or wrong, identifying yourself as an “introvert” often seems a notch above “hermit” or a “weirdo.” That’s why it’s a label many of us have been reluctant to accept.
That may be changing though, thanks in part to a new book that’s focusing renewed attention on what being an introvert really means. In a recent Time cover story, Susan Cain, author of “Quiet: The Power of Introverts in a World that Can’t Stop Talking,” maintains introverts aren’t necessarily shy or anti-social. They simply tend to be more cautious and sensitive – preferring an environment of minimal stimulation to one filled with chaos. As a result, they’re better listeners, which often makes them better leaders. In fact, Cain cites a Wharton study that found introverted leaders delivered better results than extroverts when managing employees, in part because they encouraged others’ ideas.
You see, it’s not that introverts can’t engage. Sometimes they just don’t want to… at least not right then and there. Introverts like to gather information and internalize their thoughts before speaking up. As such, their recommendations tend to be thorough, well thought out and often more strategic than those from their charismatic, shoot-from-the-hip counterparts. In fact, a recent New York Times editorial asserted introverts may make better doctors for these very reasons. I’d say the same can be said for communications and marketing strategists, as well.
What’s more, introverts value preparation, engage in meticulous planning and ask insightful questions that can inform strategy and uncover hidden landmines. They are often better speakers because they take the time to research their audience and tailor a presentation that provides meaningful information. Perhaps most importantly, they prefer to express themselves through writing – a key skill for any communications professional.
While introverts bring tremendous value to any organization, research suggests they become truly powerful when paired with extroverts whose strengths complement their own. So the next time you’re assembling a team to develop a marketing strategy or tackle a communications challenge, be sure it includes an introvert or two. We probably won’t be the ones waving our hands on the front row, but our influence will be equally strong and far-reaching.
Photo by: David Castillo Dominici
I am stunned to see that the National Federation of Independent Businesses (NFIB), an organization to which I belong and generally support, sponsors an article advising small business owners not to apologize to customers when a mistake has been made.
How did the the enewsletter piece, entitled, “Why You Shouldn’t Apologize to Customers” get past the otherwise sensible editors and member advocates? In my opinion, telling small businesses to be careful not to apologize for a mistake is the singular worst piece of business advice I’ve heard in a long time.
The article suggests that you are more likely to be sued if you issue an apology because it infers guilt. Not necessarily so. Telling business owners, especially those of small businesses, to stay away from the “sorry” word seems irresponsible and short-sighted to me.
Most small businesses are built on relationships. The owners usually know every customer by name and, in fact, the customer frequently considers the business a partner, rather than just a vendor. Not apologizing for a mistake with your partner is just plain rude – and it’s bad business. In fact, there is a growing body of evidence that indicates an earnest apology can help defuse customer tensions, preserve goodwill and reduce law suits.
We all make mistakes and when we do, as a general rule, we should fess up and fix it. It’s my experience on both a personal and professional level that when you are honest with your friends and partners, they feel validated and listened to … and they will work WITH you to help get the problem resolved. Refusing to admit the mistake leaves them no option except to get testy and aggressive.
In fairness to NFIB, I clicked through to another article that is far more sensible and offers advice on how to deal with customer complaints. Perhaps it’s just the title of this article and all it insinuates that I really object to.
A friend once told me, “If you have to ‘eat crow’, eat it while it’s hot.” I couldn’t agree more.
Have you ever had to apologize, admit an error, or bow and scrap before a customer? How did it go?
Green Marketing Grows Up
While some environmentally responsible organizations began incorporating green marketing initiatives into their overall business strategy as early as the 1970s, green marketing came into real prominence in the 1980s and early 1990s. Today, green marketing has evolved into a sustainable movement that’s at the forefront of a growing number of CEOs, corporate boards and investors, too.
This evolution is clear in “The Sustainable Economy,” published in this month’s issue of the Harvard Business Review. The article is co-authored by the founder and chairman of Patagonia, known for its commitments to environmentalism and social responsibility, the founder of Blu Skye, a sustainability consultancy, and Patagonia’s VP for environmental initiatives.
The authors quickly acknowledge a simple problem in the quest for a sustainable economy: It’s generally cheaper to buy the product that has a worse impact on its environment than the equivalent product that does less harm. At least today that still holds true. But they go on to provide hope that three key developments in the quest for a sustainable economy will at some point inevitably converge, resulting in a new paradigm where a successful business and a sustainable business are one in the same. Could it possibly be so?
The first of these three developments is an effort to measure ecosystems in dollars and cents. While that may sound a bit “cold,” the authors make the point that while “the bounty of nature is priceless,” the failure to put a price on resources creates a mind-set in which they are treated as free. With a valuation system for natural resources, the “cost” of environmental damage and resource depletion can be factored into the bottom line as never before, making it more difficult for companies to downplay or disregard these impacts.
The second development also pertains to dollars – investment dollars, to be exact. Investors today increasingly use factors like environmental sustainability and social responsibility not only to filter out negative investment prospects but to positively valuate companies that limit their environmental impacts. These companies, investors are learning, are often better managed overall and their sustainability efforts help mitigate risks of negative impacts like regulatory enforcement actions, lawsuits and the depletion of natural resources essential to their business.
The third trend is the development of “value chain indices.” A VCI establishes parameters by which companies in a particular industry segment can be compared against one another. This tool could be used to weigh the difference between a company that generates a high volume of emissions that impact air quality, utilizes non-recyclable packaging and discharges toxic chemicals in the wastewater from its treatment process against another that powers its operations from renewable energy sources, minimizes packaging and uses recyclable materials and effective treats or reuses its wastewater.
All of these factors “add up,” if you will, to a very real and quantifiable impact to the bottom line that may finally take sustainability mainstream, not just for companies like Patagonia but for any value-seeking organization or investor.
Read the full article “The Sustainable Economy” by Yvon Chouinard, Jib Ellison and Rick Ridgeway in the October 2011 issue of the Harvard Business Review. And let us know where your organization stands in this evolutionary chain. What types of green marketing strategies have you tried? And where does your organization fit into the sustainable economy of tomorrow?
As the mother of an (almost) two-year-old, taking turns is a frequent topic of conversation in my house. We’re still working on mastering the fine art of sharing but – despite an occasional “my turnnnn!”-induced meltdown – it’s a concept my toddler innately seems to grasp.
Aside from the occasional aggressive driver and that guy in the Southwest boarding line who pretends he didn’t see you, most adults seem to understand when it’s their turn as well. However, even the most fundamental lesson can be forgotten in the glare of the media spotlight. I was reminded of this recently when working with a hospital client that had been involved – ever so indirectly – in an unfortunate event that generated quite a bit of media attention. While I can’t share the details, I can tell you that the hospital did not cause the event, nor were any of its personnel involved. As news crews descended upon the hospital’s campus, the CEO – who understands the importance of building and maintaining strong relationships with local media – began preparing for an on-camera interview.
Normally, this would be the right move. We often blog about the do’s and don’ts of media relations and the importance of being accessible – especially in times of crisis. Yet, speaking out on news that isn’t “your’s” can sometimes do more harm than good. Rather than respond to inquiries – and become the de facto point of information about this event, we advised the CEO to provide minimal information off camera and politely refer media to the local authorities for more detailed answers. As a result, the hospital was largely excluded from media coverage – likely a different outcome than if the CEO had gone through with the interview.
By acknowledging the incident without assuming ownership of it, the hospital made the best out of a bad situation. Yet, sometimes the lines aren’t as clear. When something bad happens to someone we know – even indirectly – it’s human nature to want to help by providing information and even expressing sorrow or regret. Apologies are appropriate in many cases, however they can backfire in others. While there are no “textbook” answers in public relations, it’s important to evaluate the pros and cons of each media request carefully. Stop and ask yourself “is it my turn to talk?” Sometime the answer will surprise you.
Photo by: Maggie Smith