Operational Resilience

A key tenet of Operational Resilience – the topic Elise Olding, Donna Fitzgerald and I have been writing about lately – is the ability to drive decision making to the edges of the organization where the employee comes in direct contact with the customer. The belief is that if employees have the leeway to make the best decision on behalf of the customer, the result is increased loyalty and repeat business.

There are well-documented examples of how this works. Hampton Inn lets any employee remedy a customer’s complaint on the spot. The result is that for each dollar they spend on the cure, they get $7 in repeat business. The Ritz-Carlton gives employees $2000 to spend to fix customer dissatisfaction.

But not every business trusts their employees to do the right thing, hence the spate of inflexible rules and lack of decision making capabilities “at the edge” where company meets customer.

I recently experienced such rigidity when I was trying to book an appointment for a spa treatment following a particularly arduous business trip. I called from the plane during a layover thinking that a facial would be a delightful way to end a stressful week. Although the spa had and opening and I had a credit on my account, the credit card on file had expired. Therefore, the person called the concierge told me she could not hold the appointment until I provided an updated card number.

Reasonable policy? Maybe. But here’s the glitch. Since I was calling from a public place, speaking my card number aloud was not an option. I was told she could not make an exception even though I had a credit with them and was considered a preferred customer. So here’s a case where the concierge was not allowed to break the rules for a loyal – albeit becoming less loyal – customer. I bet you can guess what I will do once my credit is used up.

I present this example as a cautionary tale of how easily customer loyalty can be eroded, especially in a crowded market where consumers have many choices. But the lesson also applies to those businesses that feel they have a lock on the market. That’s not so easy to maintain these days in an era of social business where every misstep is broadcast widely.

My hope is that when people responsible for the quality of customer interactions read this story, they will examine their own processes to make sure they don’t have silly rules in place geared at protecting the business but making it difficult to satisfy customers. After all, how difficult would it have been to hold an appointment for me, the loyal customer, until I got home in five hours?

Organizations that strive for operational resilience will want to make sure they do these things:

Decide what the critical functional and process areas are for your enterprise.
Examine these functions and processes to establish the proper pace for each, based on what objectives need to be met.
Define the operational relationships among these critical functions and processes, and
Look for ways to reduce complexity.

If you want to read more about operational resilience, please check out the following research: Operational Resilience: Adapting for Competitive Advantage Using a Pattern-Based Strategy