This article is part two in a series of articles about The New Management, a team-leadership philosophy I have been piecing together over the last few years as both an Employee and a Manager. This will make more sense if you start at part one.

Two Stories

What’s Wrong With This Picture?

Customer approaches the service desk at a retail store with a product, clearly opened.

“I would like to return this,” Customer says.
“Do you have your receipt?” asks Employee.
“No, I don’t know where it is and when I got this home it didn’t work the way I thought it did, so I don’t really want it anymore.”
“Well, if you don’t have a receipt then we can’t take it back. And anyway it’s been opened,” says Employee.
“Well, I bought it here, I’m sure you could look it up the system.”
“I’m sorry, once a product has been opened we can’t take it back.”
“Well, can I talk to a manager?”
When she arrives, Manager listens to the exasperated customer–who has now been in the store 15 minutes–go through the story again. While she listens intently, Employee rolls his eyes, knowing that Manager will accept the merchandise and issue a store credit.

After another 5-10 minutes Employee has issued a store credit to Customer, who is relieved but frustrated the process took 30 minutes, required escalating to Manager, and retelling the story.

What’s Right With This Picture?

Customer approaches the service desk at a retail store with a product, clearly opened.

“I would like to return this,” Customer says.
“Do you have your receipt?” asks Employee.
“No, I don’t know where it is and when I got this home it didn’t work the way I thought it did, so I don’t really want it anymore.”
“OK, let me see if I can find the purchase in our system. When did you purchase it?”
“Last week,” says Customer.
“OK, and did you use a credit card?”
“No, cash.”
“OK, I won’t be able to find the record in our system then. We typically don’t take back opened merchandise without a receipt, but what I can do for you in this case is give you store credit for the amount of your purchase. Will that work?”
“Well, I would prefer the cash.”
“I would too. If you can find the receipt then I can give you cash, but without it I’ll only be able to issue store credit. Is that OK?”
“Sure.”
“OK, bear with me for just a minute while I do the paperwork and we’ll get you on your way.”

There are actually more than 2 stories here. We must count the story Customer will tell friends and family, the story that Employee will tell Coworkers, and the story of things Manager left undone to approve a simple return.

Why did the Wrong story take 30 minutes of the customer’s time? Why did it require 30 minutes of Employee’s labor plus Manager’s time?

Why did the Right story only take 5 minutes, result in a happier customer, and a less burdened Manager? More importantly, why are stories like this so rare?

More on that next time.

Introduction

Not long ago, I wrote about what I call “The New Business” in a series of articles arguing, essentially, that if businesses want to “win” they need to differentiate based on something other than price, location, or local hegemony due to the flattening of barriers to entry. I said in the first article that to succeed a business needed an experience for the customer and a story for the employees. This series is about the story.

Burn Your Mission Statement

I don’t know when it was, but sometime before I reached adulthood every business became convinced it should be spending hours of executive time in a small room creating a Mission Statement. This, prima facie, may seem like a good idea, and it may have been in the distant past. But Mission Statements have become an absurdity.

Every mission statement I have ever read says something like “We want to be the premier provider of Widgets and Widget Accessories” or “We strive to fulfill our customers’ objectives.” Lofty goals, certainly, but wholly meaningless and a waste of time. These Mission Statements, admittedly abstracted–but not much–fail to guide employees in decision making and serve only to demonstrate to customers that you really have no idea how to help them.

Who Are You? What do You Want?

If a mission statement like those above is the best your business can do, then you should probably quit. If you’re the owner, president, or CEO you should close this window, turn off your computer and cash out now. A combination of the demands of New Business and the tough economic climate mean you’ve already hit, or just haven’t yet seen the iceberg. It may take years to sink that ship, but trust me, it does not pay to be the last one off the boat.

If your business has more potential than your cobwebby Mission Statement, or you’ve lost your way and are willing to sacrifice to find your compass then I’ll talk a little more about story in the next article.

Since no one asked…

[click for big version]

Taken in Morro Bay, Ca. This photo is so good that it has already lost me a photo contest. But I like it. Click for a little better view.

I don’t know where I heard or saw this originally, but in my semi-regular bill paying/junk shredding/paper filing, I found a post it note on which I at some point wrote the following:

Fundamental Theorem of UI:
Value > Pain = Conversion

So think about that.

Not long ago, I wrote about what I call “The New Business” in a series of articles arguing, essentially, that if businesses want to “win” they need to differentiate based on something other than price, location, or local hegemony due to the flattening of barriers to entry. The series was both wishful and (hopefully) prophetic.

It was probably also nothing new. The series was born of a confluence of ideas, both mine and others’. I find it highly unlikely that the output of said confluence is unique to me.

Though I do my utmost in the situation I find myself, I am largely powerless to leverage the ideas, which leads me to question the validity of my points; a lot of businesses make money by being big, stupid, and intractable. Am I full of crap?

I don’t think so for a few reasons:

• First, “good” times mask a lot of problems. People and businesses tend to make bad decisions even if the cost is high so long as it is not painful. For example, in much of the United States little thought, if any, is given to using land efficiently: it is not a scarce enough resource for most people to consider how widely it is misused. If the cost associated with land misuse was similar to the cost of losing one’s house to foreclosure, our farm production, housing and commercial development would be quite different.
• Second, the Old Business culture is very entrenched in many industries and parts of the country. Like any movement of dissension, the status quo can circle the wagons and are already doing so to the degree business, employee, and consumer cultures allow it. The wagons are circled in all the “traditional business” places but in the predictive edges, change has already come.
• Third, it occurred to me in writing this article that this “New Business” has some structural similarities to the pre-industrial, small-town Norman Rockwell business climate. Personal service was the norm because your customers were your neighbors. That time may be an idealized construct–I haven’t done the research to know–but either way, there is an expressed desire for that feeling merged with the convenience and pricing a WalMart provides. In this Brave New World, The New Business can provide both price and service with a narrow scale.
• Finally, as has been plainly demonstrated in the last six months, bad decisions (and good ones as well I suppose) can have a very long fuse.

So economic growth, a large infrastructure and a lot of capital make it difficult for Circuit City to realize they aren’t a viable business. Or more accurately, that opening stores everywhere Best Buy does with the same products, pricing, experience and (lack of) employee culture is not a viable business model.

So this follow up is really an unprovoked defense (since there was no feedback at all) of my first articles on those grounds.In the first article in my “The New Business” series I said a business also needed a story for the employees. More on that soon.

This article is the the final of four on a topic I touched on in my post Your Brand Isn’t a Logo, It’s a Lie, this series is about positive creation of customer experience.

Conclusion

My personal examples are all from consumer-facing businesses because these changes are starting in the consumer sector and are the most obvious there. In time they will permeate every corner of business. In some regions and industries they’ll take a little longer, but they’re coming. Which is to say that a law office may not need a kid’s craft area (some might…) but you can’t win by being the last business to catch the coming wave.

Like my first article on this subject, I’m not trying to convince the naysayers. If you think this has nothing to do with your business, market, or sector, then you’re choosing to do nothing in the face of change, choosing to drive your business into the ground, and choosing to fail.

Good riddance: I’m tired of clueless businesses who just don’t care.

I said in the first article that in addition to a customer experience a business also needs a story for the employees. Stay tuned for more on that.

This article is the third of four on a topic I touched on in my post Your Brand Isn’t a Logo, It’s a Lie, this series is about positive creation of customer experience.

Zappos

This is the “big boy” of the businesses I am recommending in The Real New Business series, and you’ve probably heard of them. They were, after all, featured on Oprah.

Zappos sells shoes online. Which one might think would be a very difficult way to build a business. No one buys shoes without trying them on, and it’s very tough to get a feel for the look of a shoe on a website.

So how does a company win at that game? Take it from the Zappos vision:

• One day, 30% of all retail transactions in the US will be online.
• People will buy from the company with the best service and the best selection.
• Zappos will be that company.

Or you can consult item one of their Core Values:

Deliver WOW Through Service

Zappos offers free shipping both ways (in the event you return a purchase), a 365-day return policy as long as the items are in new condition, great prices, and huge selection–even for someone who wears size US15.

When I used to shop retail for shoes, I had 1 or 2 pairs to choose from and shoes that could be ordered in my size were not returnable, even though I couldn’t try the shoe on before purchasing. Once I placed an order with Zappos 8 hours after the cutoff and still received my shoes the next day. Where do you think I now buy all my shoes from?

Coming in The Real New Business Part Four: conclusions.

This article is the second of four on a topic I touched on in my post Your Brand Isn’t a Logo, It’s a Lie, this series is about positive creation of customer experience.

Plumgood

In Nashville it isn’t as easy to get organic and all natural products as it was in California. At least, not if you shop in a “traditional” chain grocery store. We found a cheaper, more convenient way to get our groceries, organic or not.

There’s a company here called Plumgood that sends out big purple delivery trucks every day. The trucks are full of groceries. Plumgood has a full suite of grocery products (check it out on their site, see if you can’t complete a reasonable grocery list) that they will deliver to your home in insulated tubs.

Here’s the fine print: the minimum order is $50, place your order by 11PM for next day delivery, leave the tubs out for your next order, they don’t suggest leaving the food out all day if you order perishables, and the customer service is great. That’s it. No gotchas. Prices are competitive; a few things are a little more expensive, but compared to paying for gas to drive around the city getting everything you need, that’s peanuts.

If we have a small need, we’ll run to a “traditional” store. But do you think it’s easier to shop from your kitchen where you can see what you need, or in a busy store, unsure if you’ve forgotten something? Which business do you think actively creates pleased customers?

Coming in The Real New Business Part Three: shoes.

This article is the first of four on a topic I touched on in my post Your Brand Isn’t a Logo, It’s a Lie, this series is about positive creation of customer experience.

Summary

You can’t coast anymore. Most business segments are saturated with near-identical competitors. Compete on price if you want to race to the bottom. Or you can wake up and realize that you only need two things to win: an experience for your customers and a story for your employees. This series is about customer experience. These aren’t new ideas, I’m just sick and tired of businesses who don’t get it and don’t want to.

Fairytales

A mere two blocks from my house is a children’s bookstore called Fairytales. My daughter only knows the name of two retail stores and Fairytales is one of them.

The are plenty of bookstores in Nashville and Fairytales isn’t special because it’s 2 blocks from my house, or the selection of entertaining and educational books and toys is good, or they carry many unique products, or they’re locally owned, or because the staff are friendly. Though all those things are true.

About one-third of the Fairytales retail space contains not products, but a craft and play zone for kids. A baby-gate keeps kids from running off and staff members are dedicated to supervising and engaging the kids in a safe environment.

Off of the main retail space there is a “parent’s zone” with seating, relaxed decor, free wifi, and beverages. Parents can talk, relax, shop, or use the internet for up to 2 hours while the kids are in the play zone.

Compare that to any experience you have ever had with a toys-r-us type box-store. Which do you think has more casual visitors, more repeat customers, and more grateful fans who tell friends and post positive experiences on their blogs?

Coming in The Real New Business Part Two: groceries.