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Never disrespect your customers

More respect for customers = more value. For everybody.

Last week The Social Market Foundation (a British think tank) issued a report saying a lack of competition in key markets in the UK was causing consumers to lose faith in business and in capitalism.

The picture was bleak, The Foundation said, Many big companies were treating us with contempt, because they were simply not worried about losing us as customers.

Scott Corfe, the Foundation’s chief economist, commented that big companies in sectors such as broadband, mobile telephony and banking did not face enough competition and were able to charge more while investing less.

The research finds that all too often, the markets that matter most to consumers are concentrated in the hands of a small number of large companies. That’s bad for customers and bad for the wider economy: where companies don’t have to fight hard to win and keep their customers, they face less pressure to reduce prices and to increase quality, to invest and to innovate.

The UK’s economic status quo is at a critical juncture, says the Foundation. Faith in a largely “free market” settlement is increasingly in doubt, as household incomes are squeezed and many fail to see economic growth translating into an improvement in their day-to-day lives. In this environment, it is more important than ever that consumer markets work well and deliver good outcomes for households. If they don’t, warns the Foundation, markets risk being replaced with state ownership as the electorate loses faith in private enterprise.

This report really hit home for me, having written recently about how powerful respect was as a mobilising force among employees. The truth is, it is just the same among consumers.

Creating value for customers is the only way to create value for shareholders and other stakeholders. No company can be a force for good for all of its stakeholders unless it makes a profit. Making good profits enables you to do good. Serving customers better than your competitors do helps to keep your business in existence, give employment, hire suppliers and provide value to local communities. In a world of connected consumers, whose publicly stated views on brands are far more powerful than any direct advertising a brand might do, resonance is everything. How you make them feel is critical to your success.

That is why I hear more and more leaders becoming obsessive about customer centricity, and ensuring that their purpose reflects this. Sadly, the big companies without competition may care less about it. They pay lip service, but do little to ensure it is embedded throughout their businesses.

But what is customer centricity? To me, it means knowing exactly who the customer is, what their needs are and what they are trying to do. If every person in the organisation knows and understands this, it shifts the emphasis from an inside-out focus to an outside-in one. It can help to make you more human, because everyone in the organisation thinks of the customer as a human, thus developing far greater empathy and respect for customers. Being able to do that brings huge dividends. By bringing the customer to life in these ways, organisations stand a better chance of driving greater engagement inside and outside the organisation, and improving trust and reputation.

Customers want to be respected

In 2014, Good Relations, part of Chime Communications (a global sport, entertainment and communications business) conducted research with more than 12,000 consumers in the UK to find out which brands they really loved, and why. As relationships with customers are, in particular, such a valuable asset, Good Relations asked themselves if they could create a way to truly understand the nature of relationships with customers, studying and contrasting the best- and the worst-performing brands to understand the key drivers of quality relationships today.

They created ‘Triple G’, a groundbreaking study that measured how good a business is in the eyes of the UK public. Where a Triple A rating in the City of London is used by the investment community as an aggregator of an organization’s ‘hard capital’ or financial performance, the Triple G rating scores a company’s ‘soft capital’. Soft capital does not appear on a company’s balance sheet, but reflects how ‘good’ a company is seen as being by the public – a true indicator of a company’s sustainability and future performance.

Relationships are a consequence of ‘what you do, how you engage with people, and then what they say about you’, which in turn determines your reputation. Good Relations, using Chime’s Insight and Engagement research division, asked consumers to score each brand on those three elements. They asked the 12,000 consumers about 120 brands and focused on:
1.good actions: ‘what the business does when no one else is looking’;
2.good engagement: how well the business communicated and listened to their consumers;
3.good recommendations: how strongly respondents were prepared to recommend the brand to friends, family and colleagues.

Brands that scored highly on all three dimensions included John Lewis Partnership, Amazon, Waitrose, Samsung, Asda, Kellogg’s, Cadbury, Virgin Atlantic and Johnson & Johnson. Out of the 120 brands tested, just 16 were awarded the Triple G rating for good actions, good engagement and good recommendations. The brands that did not do so well were – as the Social Market Foundation found – the mobile phone, utility, and banking sectors. Worst on the list was RyanAir – where consumers felt they were overtly disrespected.

An emotional bond is your Teflon layer

The research proved that creating an emotional connection of mutual respect with people offers a huge competitive advantage to brands. The Triple G research showed that brands that do this effectively show they share a customer’s values, generating a sense of closeness and real empathy. Today, consumers want to look behind the image and seek more substantial ways of choosing who to align with. Brands that create great relationships of respect with their customers create a Teflon-like ability to withstand uncomfortable scrutiny.

The research also showed that you need to give respect to get respect. Surprisingly, companies do not do this enough. Brands that performed well in the Triple G survey all showed respect and care for their customers in everything they did and said. And brands that achieved the highest Triple G ratings did this really well. They managed to convey that they really care, and created a mutual relationship that worked effectively for both parties.

Sectors and companies that either mindfully or inadvertently disrespected customers set up a cycle of destructive disrespect, creating high numbers of detractors, who we all know are more active than happy customers. Close analysis of more than 50,000 verbatim comments from the 12,000 consumers researched, showed that the three key lessons of the highest-rated brands were quality, respect and relevance.

First and foremost, a great product or service was the foundation for a great relationship. If it answered consumer needs better than anyone else, the brand was already at an advantage. Second, those brands that demonstrated active care and attention that went beyond expectations, and showed they respected their consumers, were able to capitalise on a good product and service and cement the relationship for the long term. Finally, those brands that did both the above well, and also constantly showed their compelling relevancy to their audiences, whether it was through products that answered needs or through being a force for good, had the highest rating of all.

I believe this is the best way for business to help increase prosperity and enable people to live well… and also maintain trust in capitalism!

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GIVE IT TO GET IT – HOW RESPECT DRIVES PERFORMANCE

In a world obsessed with reputations, we seem to have forgotten one of the most powerful enablers of good reputations.

We hear about the importance of trust, about the need for integrity and ethical behaviour.

What we don’t hear enough about is the need to give people respect.

A recent report by Maitland, one of Europe’s leading financial and corporate communications consultancies, found that 83 of the FTSE 100 businesses in the UK declared a set of values on their website or in their annual report. The most commonly expressed values were integrity, respect and innovation.

So leaders acknowledge that respect is a crucial attribute, but do they really give it, consistently, especially to their employees?

Recent research among 1800 managers and 2,200 employees in the UK, by online polling company YouGov, identified that 66 per cent of managers and 65 per cent of employees regarded making employees feel important and appreciated as the top attribute of high performing managers. This was by some way ahead of all other attributes.

The research was done for me for my new book, People with Purpose, which examines how managers can create super performance from their teams by creating a shared sense of purpose, commonly held values and aligned and stretching goals.

However, while managers and employees both know that being respected is important, all too often we see the exact opposite taking place. Managers either show disrespect to their employees, or allow employees to show disrespect to each other.

This can have devastating consequences.

“Employees are less creative when they feel disrespected, and many get fed up and leave. About half deliberately decrease their effort or lower the quality of their work. And incivility damages customer relationships. Our research shows that people are less likely to buy from a company with an employee they perceive as rude, whether the rudeness is directed at them or at other employees. Witnessing just a single unpleasant interaction leads customers to generalize about other employees, the organization, and even the brand.”

Christine says that she and her research team have interviewed employees, managers, human resource (HR) executives, presidents and CEOs: ‘We know two things for certain: incivility is expensive, and few organizations recognize or take action to curtail it.’

So, no surprise there then.

Well, yes, actually.

If both managers and employees regard respectfulness as the most important attribute in a manager, why is there still such a large gap in perceptions about being respected at work? In the YouGov survey, 73 per cent of managers felt they made their employees feel respected at work (a curious 4 per cent admitted they did little to respect their employees). However, only 40 per cent of employees said their bosses regularly made them feel respected.

Ouch.

That is 60 per cent of employees feeling undervalued and underappreciated, a lot of the time. Imagine the level of negative neurotoxins at work in their brains!

What effect would greater feelings of respect have on employee willingness to give of their discretionary effort?

The YouGov research shows that if managers could move their performance here from poor to good (not outstanding, just good) the payback would be a 36 per cent jump in discretionary effort, according to the employees we surveyed.

A 36 per cent improvement in productivity, by simply showing more respect! Imagine the impact of that on productivity, costs, innovation, customer satisfaction, profitability?

As Christine Porath says: “Feeling cared for by one’s supervisor has a more significant impact on people’s sense of trust and safety than any other behaviour by a leader. Respect also had a clear impact on engagement. The more leaders give respect, the higher the level of employee engagement: people who said leaders treated them with respect were 55 per cent more engaged.”

Whether you lead a major organization or a small team, my focus has been on trying to understand what you need to do to bring out the very best in other people. After five years of research, I have now interviewed more than 120 CEOs, surveyed 3,000 managers and 6,000 employees, and read just about every book there is on leadership and communication.

I am convinced that giving respect is a crucial element in building engaged employees, and winning and keeping loyal customers.

Instead of focusing on how to get a good reputation, focus on how to ensure every person on your team gives respect to each other and everyone else they deal with.

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https://www.amazon.co.uk/People-Purpose-Leaders-Thriving-Organizations/dp/0749476958

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THE VALUE OF VALUES

I have always defined the values of an organization as its beliefs in action. Any organizational culture, really, is ‘how we do things around here’. The key word is do. Values drive beliefs and beliefs drive behaviours. Those behaviours determine how well an organization performs. These behaviours are your culture.

Those values, therefore, if truly lived in an organization, can become a competitive edge that enables and drives all the right behaviours. As Dee Hock, the founder of Visa, says: ‘Simple, clear purpose and principles give rise to complex, intelligent behaviour. Complex rules and regulations give rise to simple, stupid behaviour.’

Values should encourage the right behaviours in an organization. They should ensure ethical behaviour. They should enable behaviours that help to deliver the business plan. But above all, they should enable people throughout the organization to make decisions on their own.

The problem is that depending on where you sit in the organization you are likely to opt for a different set of values. Managers will want behaviours that deliver high performance. Employees want behaviours that give them a great place to work. Marketeers want behaviours that win and keep customers. Boards want ethical behaviours. Leaders want behaviours that deliver the future vision. All should be catered for.

This idea caused me to research the different categories of values used by many companies. I believe that anyone looking to refresh their values or establish new values for their teams or their businesses should think about these categories when devising the right value set for them.

Values should help the company to achieve its goals and deliver its purpose. Yet most organizations have what I would describe as a hodgepodge of values that do not fully empower employees and are exactly the same as most other companies, including competitors. When considering your values, think about what you are trying to achieve, and which behaviours you want to influence or engineer.

I believe there are six places to look for your core values. Here are the areas to think about:

1.Licence-to-operate values.

There are some values that every organization should adhere to. Honesty, integrity, respect, innovation – what business could survive if it didn’t have these? That, I believe, is why so many of the FTSE 100 companies in the UK have exactly the same values. Everyone needs teamwork and collaboration. Everyone needs to be safe. I could go on and on. These are what I would describe as cleanliness values. Of course you must have them. Society expects these of you, but because of this, all companies have these and they do little to distinguish and differentiate.

2.Differentiating values.

These are values unique to your organization, which help to differentiate you in the marketplace. What is it about the way you do things that makes you different? How do you deliver unique offers to customers? What aspects of your brand are recognized and applauded by your consumers? These values need to be kept alive and leveraged constantly for you to maintain the promise of your brand in the marketplace.

3.Nice-place-to-work values.

Ask employees what matters to them, and you will find a whole set of values that ensure they work in a place that enables them to do their best, while also making them feel cared for and respected. You need these too.

4.High-performance values.

Talk to managers, and most of them describe a set of values around creating a high-performance culture. They want accountability, agility, ideas, commitment, innovation and more.

5.Current values.

As organizations grow and develop, a set of behaviours take root in that organization for all sorts of reasons. The founder might have had a personal set of values that became embedded as the organization grew. Successive leaders might have brought in their own beliefs and put in place operating processes driven by those beliefs. Whatever the reason, the organization will have a real set of values that manifest themselves as behaviours throughout the organization. These are the real and current values, not all of which are desirable and should be sustained. You have to truly understand what values live within the organization now and are brought to life in behaviours. Which are the behaviours that are undesirable and need to be stopped? Which behaviours happen only infrequently, but need to be made more commonplace? Which behaviours are critical to your success and must be maintained?

6.Future values.

Every team, every division, every company and every organization has a plan. Progress requires new and stretching goals, greater productivity, new products and services, new customers or new business from existing customers. To achieve these things will require new behaviours. If not, then what will enable the growth? And if they are new behaviours, what are the values that must underpin those behaviours? What beliefs need to be instilled in the business that will encourage the right behaviours throughout the organization? Too often, leadership teams fail to recognize that business plans require new behaviours, and those new behaviours may require new and different values that must be embedded.

Core values.

From all of these categories, the organization’s core values should then be selected. These should become the deeply held beliefs that guide all of the company’s actions, creating a moral compass that guides all decisions, at every level of the organization, always. Once decided on they should be sacrosanct, never compromised for convenience or short-term gain.

I have enjoyed interviewing more than 120 CEO’s for my three books, and I have found them to be unanimous in their view that articulating values and purpose was one of the most important jobs of leadership. They see it as a conversation without end, on board and management agendas, discussed on roadshows and workshops.

A shared sense of mission and values was inspiring, empowering and liberating and created enormous value in those companies that really brought them to life, they said. About nine out of ten of the leaders I have interviewed say they believe that values create value and were increasing in importance in a transparent, radically connected world.

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https://www.amazon.co.uk/People-Purpose-Leaders-Thriving-Organizations/dp/0749476958

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Some hard facts about soft skills

A lack of soft skills could be costing the UK billions a year in lost productivity. Yet soft skills are often undervalued, and sometimes ignored, as we seek to progress in our careers.

There are some hard facts you must absorb about these soft skills – which you ignore at your peril.

First, and most obvious, is that you won’t achieve much as a manager if you don’t sharpen these skills, and as a consequence you won’t progress. It is that simple. It doesn’t matter how senior you are. Enhancing your soft skills is the real route to leadership success.

Perhaps I am being over simplistic, but it seems to me that if you don’t achieve as a manager, your team won’t succeed, which means your company won’t succeed, which means your country won’t succeed.

You think I am exaggerating?

Just this week, hopes that we were getting on top of Britain’s chronic problem of low productivity were dealt a severe blow by official figures from the Office of National Statistics. Productivity statistics showed that this key measure of national prosperity has fallen for the first time since 2015.

While almost every advanced nation is struggling with stagnant productivity, the issue is particularly bad in Britain where there has been no growth in almost a decade. As a result, employees in this country must work about a day and a half longer than their German rivals to achieve the same economic output.

Productivity is key to living standards.

This really matters, because productivity is key to improving living standards. Gains in productivity mean we can produce more with the same resources and reduce costs. Those savings can then be shared in lower prices for consumers and higher wages for workers, without having a negative effect on the profitability of companies.

The UK’s productivity has fallen by 0.5% over the first quarter of 2017, according to the Office for National Statistics. This means that the country’s productivity has now fallen below the output per hour achieved in the final quarter of 2007, and a fall of 0.5% is also below the 1994-2007 labour productivity growth average, representing a worrying trend of stagnating productivity growth.

Ann Francke, CEO of the Chartered Management Institute, says this latest set of data will be a worry for those looking to solve the productivity puzzle that has dogged the UK since the start of the economic downturn.

“It’s alarming, but perhaps expected given the current political backdrop of Brexit and weak leadership, that the UK’s recent trend of productivity growth has ended,” she said. “Action needs to be taken before this becomes a downward trend. Investment in skills and management training is a crucial step to boosting productivity. Poor management is costing our economy £84bn each year, and Britain lags other countries when it comes to people skills. Indeed, four out of five British bosses are ‘accidental managers’ who’ve never been trained.”

Soft skills, says the CMI, are particularly crucial for managers, because they are the basis for leaders to effectively give directions to people with a persuasive flair, and influence their team to strategically pursue the organisation’s goals and objectives. Again and again, the answer comes down to two things: professional leadership that’s informed by integrity and vision; and genuine employee engagement so that everyone is inspired to contribute to improvement.

Need more hard data? How about this?

I’ve recently read an interesting report that says that soft skills, those very human interpersonal skills around communication and empathy, contribute £88 billion a year to the UK economy – a contribution that is expected to rise to £109 billion over the next five years.

97% of employers say soft skills are important to business success.

But the UK is definitely struggling with them, and by 2020 over half a million UK workers will be significantly held back by a lack of such skills. These were the findings of economic research commissioned by McDonald’s. It quoted 97% of employers saying they believed that soft skills were important to their current business success, while over half said skills like communication and teamwork were more important than academic results. Yet three-quarters of them believed there was a ‘gap’ of such skills in the UK workforce.

The research also revealed that UK employees say they struggle to sell their soft skills. One in five said they would not feel confident describing their soft skills to an employer and more than half (54%) have never included soft skills on their CV. It would suggest there is a lack of value placed on such skills in business and society as a whole.

Soft skills of leaders contribute enormously to engagement levels of employees, and therefore to productivity. Engaged employees with great soft skills give customers a far better experience, creating more loyal customers, and more profitable companies.

Soft skills are not just important when facing external customers and clients. They are equally important when it comes to interacting with colleagues. Soft skills relate to how you work with others. Employers value soft skills because they enable people to function and thrive in teams and in organisations as a whole. A productive and healthy work environment depends on soft skills.

However, it is not just an issue for customer service orientated companies, but also for professional service organisations. A survey of CFO’s found that 55% considered the biggest challenge in recruiting accountancy professionals was finding applicants with the necessary soft skills beyond the normal competences and qualifications expected.

Additionally, a UK Commission for Employment and Skills study confirmed the increasing importance and demand for soft skills in the Health and Social Care; Professional and Business Services; Retail & Wholesale; Creative Industries, Media and Entertainment; and Manufacturing sectors.

The CBI places particular emphasis on the soft (employability) skills of graduates and other young people. “Businesses want graduates who not only add value but who have the skills to help to transform their organisation in the face of continuous and rapid economic and technological change. All graduates need to be equipped with employability skills. Employability covers a broad range of non-academic or softer skills and abilities which are of value in the workplace. It includes the ability to work in a team; a willingness to demonstrate initiative and original thought; self-discipline in starting and completing tasks to deadline.”

Rather call soft skills, “professional” skills.

My take is that we give too little respect to these essential skills when we call them “soft” and imply that they’re optional. I prefer to think of them as professional skills, not soft skills.

Leadership skills. Interpersonal skills. The skills of charisma and listening, storytelling and visioning, persuading and aligning. These are crucial because what actually separates thriving organizations from struggling ones are the difficult-to-measure attitudes, processes and perceptions of the people who do the work.

If this is true, then you’d imagine that managers are constantly engaged in using their soft skills in uplifting and inspiring conversations with their employees?

Not so. Writing in the Harvard Business Review, Lou Solomon recently reported that 69% of managers are uncomfortable communicating with their employees. The only surprising thing about this statistic is how low it is. I’ve been doing research into the subject for years now and I know that it is true that the majority of our managers (who are well-paid, well-trained and integral to our success) are uncomfortable doing this essential part of their job!

What about the next generation of managers coming out of the universities? In a recent survey, the Graduate Management Admission Council, who own the GMAT exam, reported that although MBA’s were strong in analytical aptitude, quantitative expertise, and information-gathering ability, they were sorely lacking in other critical areas that employers find equally attractive: strategic thinking, written and oral communication, leadership, and adaptability.

When I interviewed more than 80 CEOs for my first book, the language of leaders, I was seeking to find out what soft skills they had learned over their careers to help them be more inspiring. At the top of the list they said was learning how to use your passion and your personal values to inspire people to great performance. You had to act with integrity, be authentic and know how to truly connect with people at an emotional level. They said that good communication was passionate communication.

Being able to articulate and inspiring vision of the future, a compelling purpose, and a set of values that created a common culture were essential to being a great leader. But none of this could happen unless leaders were focused on their audience, both in terms of listening to them and in crafting relevant messages. They said that leaders needed to be visible, constantly on the road and in the corridors, engaging with people in an on-going conversation. they have to concentrate on learning the soft skills that would enable them to inspire their people. It was no longer enough to have “domain excellence” (experience and skills related to the marketplace you serve) – the most important job of a leader was to get tremendous things done through other people.

Take time to learn and improve your soft skills.

Do you want some good news? Like any skill, soft skills can be learned. Would you like even better news? Boosting your soft skills not only gives you a leg up on a new job or a promotion, but these skills also have obvious applications in all areas of your life, both professional and personal.

So, what can you do to improve the key soft skills that will make you a better leader?
• Take a Course: Look at areas such as effective written and verbal communication, teamwork, cultural understanding and psychology. Take a writing or public speaking course to boost your communication skills.
•Read more – buy books on the subject, search the Internet for everything you can find and work hard to put what you learn into practice.
•Seek a mentor: don’t be shy – speak to people that you admire and asked them to help you. Better still, employ a coach who can help you fast track your skills.
• Take this leadership skills test (http://www.leadershipcommunication.co.uk/the-test/) which is based on more than a hundred interviews with CEOs, as well as research involving 3000 managers and 6000 employees. Mark yourself out of 10 in each of these areas and take action to improve.

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