Wednesday, October 8, 2008

Service Excellence and its importance on Innovation

Innovation is a top global priority, and in the pressing market in play, keeping your business model differentiated and continuing to demonstrate value will be a key success factor for organizations growth.

We now understand that product innovation although key is highly replicable in reverse engineering. A consistent drum beat for optimization is in the service excellence arena.

Service Excellence is a strong indicator of customer loyalty.

Loyalty is about building sustainable relationships through an emotional connection. Emotional elements drive loyalty. While we talk about loyalty as an important business outcome we don’t talk enough about the powerful underlying emotions that create loyalty.

Emotions are difficult to define. Fisher and Shapiro (see “Beyond Reason”) have identified a powerful, five element framework to deal with emotions. Jamil Mahuad, used the core concerns framework to help resolve a fifty-year boundary dispute between Peru-Ecuador. We can see emotions at play in sustainable relationships, with customers, between customers in online communities and perhaps most importantly with employees.

The five core concerns are:

·Appreciation our contribution, opinions and feelings are acknowledged

·Affiliation we are treated as a colleague in a community we care about

·Autonomy we are respected for our freedom to make decisions on important matters

·Status our standing or reputation, based on past accomplishment, is acknowledged

·Role our role is fulfilling or meaningful

These five concerns stimulate emotions that align with the same observations that Hertzberg makes in one of our most often referenced HBR articles “One More Time; How do you Motivate Employees?” Hertzberg’s research showed that a sense of accomplishment and recognition are the two strongest motivators followed by responsibility and interesting work.

How good are we at paying attention to these emotional elements at work, in our service organizations?

There is now a well understood body of research that motivated and satisfied employees build stronger customer relationships. In other words - “People are people first – independent of their role”. This gets at the idea that in a services model loyal employees will create loyal customers. Or stated another way – we should think about and treat our employees the same way we would treat our customers to be successful in innovating more effectively.

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