In Search of Excellence October 2005

In Search of Excellence

Close to the customer

Peter Jansen
October 2005

The next important attribute of excellent companies as found by Peters and Waterman in their bestselling book on management In Search of Excellence is the ability to learn from the people they serve. They provide unparalleled quality, service and reliability – things that work and last. They succeed in differentiating the most commodity-like products. Everyone gets into the act. Many of the innovative companies obtain their best product ideas from listening, intently and regularly, to customers.

That a business ought to be close to its customers seems to be a given. So why should we pay attention to something that seems to be so obvious? The answer is that, despite all the lip service given to market orientation these days, in many companies the customer is either ignored or considered a nuisance. In their observations of excellent companies, and specifically the way they interact with customers, what Peters and Waterman found most striking was the consistent presence of obsession. These companies do seem to be more driven by their direct orientation to their customers than by technology or by a desire to be a low-cost producer. Service, quality and reliability are strategies aimed at loyalty and long-term revenue stream growth, compared to the short-term sales-oriented approach we see so often.

Now how do Romanian companies score on these features? How does an obsession for service and quality fit into the Romanian business culture? The answer is, it doesn’t. An obsession for service and quality seems to be at odds with the Romanian working mentality. The lack of especially service in Romania is almost legendary. It doesn’t matter what industry you are talking about – be it a restaurant, a shop or a car dealer – service levels in Romania are lacking by almost any standard. Although there may be many reasons for this – low wages, a general perception that “service-mindedness” means humiliating oneself, a lack of exposure to what service means, a lack of competition – there certainly are no excuses.

It is difficult to explain why Romanians are so poorly focused on service, but one of the reasons is definitely the lack of commitment to service by top management. (Problems always begin at the top, as I have consistently stated on these pages.) Too many Romanian managers don’t give the right example to their staff. As a client, go anywhere from a restaurant to a company, and the best parking space will be occupied by the boss. Ever gotten into a discussion about poor service and asked for the manager? Nine out of ten times, the boss will not try to solve the issue for you, he will simply start arguing. What is needed most of all is a change in attitude from top management. No matter what the issue is about, the client is always right!

It is as simple as that. And managers/owners better understand that sooner than later, or they will simply be forced out of business. Also in this respect, times are changing. I am noticing that Romanian clients have begun to be more vocal about start to complain about a lack of service. And this time it is not only the happy few that had the luxury of traveling abroad and experience what service really means. The two to three million Romanians that are working abroad in the tourist or agricultural sector will also bring home different perceptions about service. Why pay (much) more for a holiday at the Romanian seaside than in Bulgaria or Turkey, and get very low service and quality levels on top of it? Why go to a restaurant where the waiters always seem to look the other way when you want to order? Or buy a new car and find out that service goes as far as the next corner? The list can go on and on, but I think you all have your own recent experience with lack of service.

Peters and Waterman identified three principal themes in an effective service organisation: an intensive, active involvement on the part of senior management, a remarkable orientation of the company towards people, and a high intensity of measurement and feedback. As they have found over and over, it starts with senior management. Senior executives show their commitment to service through personal example. They directly intervene, ignoring the chain of command, in decisions about service. These executives believe they must maintain a long-term view of service as a revenue builder. With service as their top goal, profitability follows naturally.

This point is all too often missed in many companies. Profit objectives, while very necessary, are internally focused and certainly do not inspire people at lower levels in the organisation. Service objectives, on the other hand, are almost always meaningful to down-the-line employees. A strong sense of personal accountability among staff is crucial. Inseparable from the way these service-oriented companies manage their people is the intensity of measurement and feedback systems. It struck Peters and Waterman that programmes for people in excellent companies – incentive programs, training programmes – undergo continuous change. No practice is expected to have impact forever, and programmes for people have life cycles, just as products do.

It seems that excellent companies are obsessed by service. At least as many act the same way over quality and reliability. Almost all of them overspend on service, quality, and reliability. As David Ogilvy reminds us, “In the best companies, promises are kept no matter what the cost in agony and overtime”. Ask yourself whether you are just as obsessed about these issues as excellent companies are. If not, start by making them your personal goal. And start giving the right example to your staff.

Peter Jansen is the Managing Partner of The Bucharest Consulting Group
(www.bucharestconsultinggroup.ro), the exclusive partner in Romania of
The Boston Consulting Group.