14 Oct SURVIVING THE SCREW-UP
HOW A RAPID RESPONSE TO A PROBLEM CAN SAVE THE DAY
I have a friend who writes a weekly email to all his clients in the flooring business. He makes his living evaluating flooring failures. He’ll go to residences, businesses and institutions and make the call whether the problem was caused by a manufacturing defect, improper installation, or customer misuse.
Each weekly email is a breezy 5-minute update and includes a section called “What’s Wrong with This Picture,” which pictures different cases he’s worked, explaining what went wrong and how it could have been avoided. I imagine his clients find these weekly dispatches to be “must-read” material, because I enjoy reading mine even though I have nothing to do with the flooring business.
Although most of his emails are devoted to tips on how to stay out of trouble, his latest email featured an essay on how to respond when an installation fails. He wrote,“Your first loss is your best loss.” My boss told me this years ago. What it means is that, if you screw something up and have to fix it at a loss, fix it right and do it perfect. If you have to fix it again, the losses just keep piling up, and people get even less forgiving of mistakes. If you have to replace a floor, do it like you were doing it for a king. No matter how much time and money it takes to replace that floor, it will still be cheaper than replacing it again.
I hear in the martial arts, when someone comes at you with a knife, settle it in your mind that you are going to get cut. This removes the fear and allows you to focus on defeating your enemy. If you screw up and have to replace a floor, settle in your mind that this is going to cost you a bundle. Get the money out of your mind and focus on the task at hand. It will pay off in the long run.
I think this is advice that all of us could take to heart. Anyone who’s been in business for more than a month will understand that there are risks involved in conducting business, and sometimes circumstances work against you. The more we pride ourselves on doing everything right, the harder it is to acknowledge that we did something wrong. This is especially hard when some factor beyond our control results in the customer getting less than what they bargained for.
This is why it is so important to have a policy in place to prepare your team for an appropriate reaction when the customer is underserved.
Responding to problems—and responding quickly—can mean the difference between losing a customer and winning an enthusiastic fan for life. Word of mouth is the best advertising, and everybody loves to tell and retell the story of how company “A” went above and beyond to respond to a problem.
Stories that describe how a company exceeded expectations are only second in popularity to stories that describe how a company took a bad situation and somehow managed to bungle the response so horribly that they branded themselves the company everybody loves to hate. If you want to be the hero and not the goat, you’ve got to have a disaster plan in place before an incident, and you’ve got to make sure everyone on your staff knows what their role is.
In Joseph A. Michelli’s book, The New Gold Standard, the author describes how Ritz Carlton employees are empowered to spend as much as $2,000 to solve a problem at their own discretion without having to go up the chain of command. Now, that’s what I call a disaster plan! He quotes Vivian Deuschl, vice president of public relations at Ritz: “I’ve come to learn that the least costly solution is the one that happens immediately. The longer and higher a customer complaint lives in an organization, the more it grows.”
For many business owners, the potential for staffers giving away thousands on a whim and weakening the financial stability of the company is enough to discourage imitating this practice. However, the Ritz policy is seldom misused. The trust extended to the staff contributes to a culture where the staff feels valued and they reciprocate by being faithful stewards of that trust.
We at HUB were so inspired by the testimonial of the Ritz story that we put our own version of their Gold Standard into effect a few years ago, and it has been one of the smarter things we’ve done. In addition to putting a plan in place to respond instantly to bumps in the road, we were challenged to come up with our own version of the “Credo Card” that every Ritz employee carries as a part of their uniform. It distils the values that make up HUB’s DNA and gives our staff clear guidance on how to best serve our great clients.
Until next time,